Travel insurance (which pays a traveler if the traveler needs to cancel his or her trip) has a clause that states it will not pay if the trip is cancelled because of a pre-existing condition
If sick people are more likely to purchase travel insurance, this clause is meant to A) reduce moral hazard.
B) reduce adverse selection.
C) increase moral hazard.
D) increase adverse selection.
B
You might also like to view...
Microsoft was charged with violating the antitrust laws not because it had a virtual monopoly in the form of its Windows operating system, but because it acted like a monopolist in trying to control the market for certain software applications
Indicate whether the statement is true or false
Which of the following is most likely to reduce the nominal market wage in a job category?
a. The job requires employees to work the night shift from 11 p.m. to 7 a.m. b. The job is prestigious, and the work is quite interesting. c. The job is widely viewed as dangerous. d. The job requires employees to move from city to city quite often.
The backward-bending labor supply curve includes each of these variables except
A. the income effect. B. the substitution effect. C. the savings effect.
After some point successive equal increases in a variable factor of production, when added to a fixed amount of inputs, will result in smaller increases in output. This is known as
A) the long run. B) the law of diminishing marginal product. C) marginal physical product. D) short run average cost.