Which of the following is not an advantage of risk pooling?
A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection.
B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals.
C) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.
D) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy.
C
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An increase in labor productivity relates to
A) working harder over time. B) working longer over time. C) producing the same output with fewer labor hours. D) producing the same output with more labor hours.
When is price fixing not a violation of the antitrust laws?
What will be an ideal response?
Which of the following theories states that people who are highly risk-averse are less likely to engage in high-risk activities?
a. The theory of moral hazard b. The theory of adverse selection c. The propitious selection theory d. The death spiral theory
If marijuana were legalized, it is likely that there would be an increase in the supply of marijuana. Advocates of marijuana legalization argue that this would significantly reduce the amount of revenue going to the criminal organizations that currently supply marijuana. These advocates believe that the
a. supply for marijuana is elastic. b. demand for marijuana is elastic. c. supply for marijuana is inelastic. d. demand for marijuana is inelastic.