If a doctor knows that an insurance company will pay for most of a patient's bill, the doctor has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of
A) adverse selection. B) moral hazard.
C) asymmetric information. D) the principle-agent problem.
D
You might also like to view...
Few bother to think about what makes Florida oranges show up daily in South Dakota supermarkets, but the people of South Dakota are likely to think a great deal about this. Why does someone take the time and energy to assure that oranges that are grown in Florida move more than 1,000 miles before they appear on grocery shelves?
What will be an ideal response?
The opportunity cost of current consumption is:
A) nominal wage rate. B) the inflation rate. C) real wage rate. D) the real interest rate.
The Gallatin Plan (1808) was not passed because some individuals questioned its constitutionality
Indicate whether the statement is true or false
An increase in personal income tax rates would tend to reduce
A. gross investment. B. consumption. C. government purchases. D. net exports.