In insurance markets, moral hazard creates economic inefficiency because:
A) insurance companies are price setters rather than price takers.
B) insurance products are not homogenous goods.
C) there are many buyers but only a few sellers.
D) insured individuals do not correctly perceive the costs or benefits of their actions.
D
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Recall the Application. If consumer income in China increased and as a result the demand for pecans decreased, this would indicate that in China, pecans would be considered ________ goods
A) complementary B) normal C) substitute D) inferior
If working people in the economy become wealthier,
a. the supply curve of labor will shift to the right b. the demand curve for labor will shift to the right c. the demand curve for labor will shift to the left d. some people may choose to work longer hours e. some people may choose more leisure and fewer work hours
Refer to the graph shown. The profit-maximizing monopolist produces output:
A. Q1. B. Q2. C. Q3. D. Q4.
A firm can price its items at the same price as competitors, or try to sell its products at a price higher than its competitors. To sell at a price higher than the competition, a firm would need to: Select one:
a. enhance features or otherwise differentiate its product and justify the higher price. b. reduce the production costs so the profit margin would be higher. c. make sure its price end in a ".99.". d. be willing to lose money on that product line.