The problem of adverse selection in health insurance leads to a situation in which
A) health insurance covers inappropriate items for the population it serves.
B) overinsurance of the premium-paying population occurs.
C) underinsurance of the premium-paying population occurs.
D) the percentage of the premium-paying population that is healthy rises, squeezing unhealthy individuals out of the market.
E) the percentage of the premium-paying population that is unhealthy rises, squeezing healthy individuals out of the market.
E
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Refer to Exhibit 9-2. The economy is currently producing Q1. At this level of Real GDP, the economy is experiencing
a. a shortage in the labor market. b. a surplus in the labor market. c. neither a shortage nor a surplus in the labor market. d. all of the above are equally likely
Suppose a Dell computer that sells for $2,000 in the U.S. is exported to Canada, where it sells for 2,500 Canadian dollars. Further assume that 1.5 Canadian dollars trade for one U.S. dollar in the foreign exchange market. According to the purchasing power parity theory, which of the following will occur?
a. Computers could be purchased in Canada for 2,500 Canadian dollars, and sold in the U.S. for $2,000 . The $2,000 in revenue from each computer sold could then be exchanged for 3,000 Canadian dollars, yielding a profit of 500 Canadian dollars for each computer sold (minus any transaction costs). b. Computers could be purchased in the U.S. for $2,000 and sold in Canada for 2,500 Canadian dollars. The 2,500 Canadian dollars in revenue from each computer sold could then be exchanged for $3,000, yielding a profit of $500 for each computer sold (minus any transaction costs). c. Purchasing power parity is achieved, and there is no profit to be had from reselling the computers. d. The demand for computers would rise in both the countries and purchasing power parity would be achieved.
In the above table, if this is a perfectly competitive firm and the market price of the product is $8, what is the marginal revenue product of worker 3?
A. $240 B. $96 C. $80 D. $88
Graphically, demand-pull inflation is shown as a:
A. rightward shift of the AD curve along an upsloping AS curve. B. leftward shift of the AS curve along a downsloping AD curve. C. leftward shift of the AS curve along an upsloping AD curve. D. rightward shift of the AD curve along a downsloping AS curve.