A person with AIDS has a guaranteed right to apply for health insurance and receive coverage at the same rate as a healthy person. What is the likely result for the insurance company?
a. Rational ignorance
b. The principle-agent problem
c. The substitution effect
d. Externalities
e. Adverse selection
e. Adverse selection
You might also like to view...
The 1994 agreement that eliminated most tariffs among the United States, Canada, and Mexico is known as
A) the Pacific Trade Association. B) the Western Trade Union. C) Trade Without Borders. D) NAFTA.
A Monetarist-oriented econometric model is likely to emphasize that monetary policy affects economic activity
A) directly through changes in government spending. B) directly through changes in the money supply. C) indirectly through changes in velocity. D) indirectly through changes in money demand.
Which of the following statements about self-interest in a market system is false?
A. Self-interest usually motivates an individual to deliver something of value to others B. Self-interest of entrepreneurs implies seeking maximum profits or minimum losses C. Self-interest applies only to capitalists and entrepreneurs, not to workers employed by others D. In a market system, consumers are just like firms: self-interest is what motivates them
Which of the following is NOT necessary in order for a monopolist to practice effective price discrimination?
A) The marginal cost of providing the same good to different groups of buyers must be different. B) The monopolist must be able to segregate its market into different submarkets. C) The buyers in various markets must face different price elasticities of demand. D) The monopolist must have a downward sloping demand curve.