Describe three ways that private insurance companies deal with the moral hazard problem
What will be an ideal response?
Private insurance companies can require a deductible, which is a specified amount of money that an insured person must pay before his or her insurance company begins to help cover expenses.
Private insurance companies can require a copayment, which is a fixed amount an insured person pays when obtaining medical care.
A private insurance company can use coinsurance, which is an arrangement under which an insured person pays for some fraction of his or her medical expenses, with the insurance company picking up the other portion.
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Using the above figure, suppose there is a decrease in the number of suppliers. Then
A) the equilibrium price will decrease below $25 per dozen roses. B) we cannot predict what will happen to equilibrium quantity. C) the equilibrium quantity will decrease below 10 dozen roses. D) both the equilibrium price and quantity will increase.
Ebay's use of "bidding agents" will
a. effectively turn an English auction into a Vickery auction b. effectively turn a Vickery auction into an English auction c. decide how much to shade your bid for you d. make you a more aggressive bidder
The Fed's principal objective is to
a. make profits to pay into the U.S. Treasury. b. collect tax revenues. c. supervise the business decisions of banks. d. manage the money supply and interest rates.
Central banks can increase the money supply by:
a. Buying foreign exchange. b. Raising margin requirements. c. Increasing the discount rate. d. All of the above. e. None of the above.