In insurance markets, moral hazard occurs when the behavior of
A) the insured person changes in a way that raises costs for the insurer, since the insured person no longer bears the full costs of that behavior.
B) the insurer changes in a way that raises costs for the insured person, since the insurer no longer bears the full costs of that behavior.
C) the insured person changes in a way that eliminates rising health care costs for the insurer, since the insured person no longer bears the full costs of that behavior.
D) the insured person has an incentive to under consume medical services, simply because the insured person no longer bears the full cost of medical services.
Answer: A
You might also like to view...
The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will
A) shift either leftward or rightward. B) surely shift rightward. C) surely shift leftward. D) surely become steeper.
Price elasticity of demand is measured by the percentage change in quantity demanded divided by the percentage change in income
Indicate whether the statement is true or false
Assume that product Alpha and product Beta are both priced at $1 per unit and that Ellie has $20 to spend on Alpha and Beta. She buys 8 units of Alpha and 12 units of Beta. The marginal utilities of the last unit of Alpha and Beta that she purchases are 40 utils and 20 utils, respectively. This indicates that
A. Ellie should make no change in consumption. B. in order to maximize utility, Ellie should buy more Beta and less Alpha. C. in order to maximize utility, Ellie should buy more Alpha and less Beta. D. given another dollar, Ellie should buy an additional unit of Beta.
It costs $5,000 to produce ten visits and $6,000 to produce 20. At a volume of 20,
A. average cost is $300 and marginal cost is $100. B. average cost is $500 and marginal cost is $100. C. average cost and marginal cost are $300. D. average and marginal cost cannot be calculated from these data.