Insurance is possible and can be profitable because of
A) private information.
B) adverse selection.
C) moral hazard.
D) consumers are risk aversion.
D
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As the economy enters a strong expansion, then firms' demand for loanable funds
A) increases because the nominal interest rate rises. B) increases because expected profit increases. C) decreases because expected profit decreases. D) decreases because the nominal interest rate falls. E) increases because the real interest rate rises.
State provision of free healthcare may encourage individuals to engage in unhealthy behavior, such as excessive smoking or consumption of alcohol. This is an example of ________
A) moral hazard B) a positive externality C) adverse selection D) anchoring
How is a budget line similar to a production possibilities frontier? How do they differ?
What will be an ideal response?
Emerging nations refer to
A. countries that have per capita real GDP (Gross Domestic Product) levels beyond those of advanced nations. B. developing countries that has experienced high economic growth so that they are closer to advanced-nation status. C. developing countries that has never experienced economic growth despite their potential. D. developed countries that have continued to experience high economic growth.