Relating to the Economics in Practice on page 357: An individual with a parent who has Huntington's disease has a 50 percent chance of also having the disease, and can use this information when deciding on the purchase of health insurance. This is an example of ________ favoring potential insurance buyers.
A. moral hazard
B. asymmetric information
C. adverse selection
D. market signaling
Answer: B
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Munn v Illinois (1877) was particularly important with regard to government regulation because it
(a) upheld the traditional right of businesses to act freely without interference by government. (b) established the right of government to regulate any business that was deemed "clothed" in the public interest. (c) established the right of government to regulate any and all businesses wherever such regulation was deemed desirable to promote competition. (d) established the right of government at any level to regulate any business activity if such regulation was deemed desirable for any reason.
Which of the following statements best describes the potential gains from trade?
a. The potential for gains from trade may be especially low among the smaller and lower income countries of the world. b. The potential for gains from trade may be especially high among the smaller and lower income countries of the world. c. The potential for gains from trade may be especially high among the medium and larger income countries of the world. d. The potential for gains from trade may be especially high among the smaller and medium income countries of the world.
For a competitive, profit-maximizing firm, the labor demand curve is the same as the
a. marginal cost curve. b. value of marginal product curve. c. production function. d. profit function.
The forward contract differs from a futures contract in that:
a. the forward contract is to be settled immediately. b. the futures contract specifies a fixed amount and arranged date, whereas the forward contract can be for any amount or date. c. the futures contract cannot be traded in a market, whereas the forward contract can be bought in the market. d. forward contracts are standardized, whereas futures contracts are not standardized.