Figure 14.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. The insurance companies estimate that 40% of its customers are high-cost type. If the insurance companies set the price equal to their average cost per customer, what type of customers will dominate the market?
A. low-cost customers
B. high-cost customers
C. Both types equally split the market.
D. There is not sufficient information.
Answer: B
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(a) LDC's comparative advantage from basic skills education. (b) the law of diminishing returns. (c) development emphasis on poverty alleviation. (d) all of the above.
The higher the opportunity cost of attending college,
A) the more likely an individual will go to college. B) the more economics classes an individual will take at college. C) the fewer economics classes an individual will take at college. D) the less likely an individual will go to college.
The name balance-sheet channel of monetary policy implies that monetary policy has to impact categories on a firm's balance sheet. Explain how the balance sheet of a firm will be impacted by an increase in interest rates.
What will be an ideal response?
Refer to Figure 7-1. Under autarky, the equilibrium price is
A) $54. B) $0. C) $24. D) $30.