One way that insurance companies deal with imperfect information is to classify people into ______________ and charge lower premiums to those in the lowest category.
a. income groups
b. risk groups
c. economic sets
d. moral hazard sets
b. risk groups
Insurance companies often classify people into risk groups and charge lower premiums to those with lower risks.
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Refer to Figure 4.5. In which of the following cases will you be rewarded with the most extra points?
A) Seven of your classmates choose Dash and you and the rest choose Solid. B) All of your other classmates choose Solid and you choose Dash. C) Half of your classmates choose Solid and you and the rest choose Dash. D) One of your classmates chooses Dash and you and the rest choose Solid.
In games without dominant strategies the Nash equilibrium can be found by using:
a. the cooperation vs. grim trigger strategy. b. the chain-store paradox. c. the principle of backward induction. d. the method of iterated elimination of dominated strategies.
You and your friends watch a movie in your bedroom. For you and your friends, the enjoyment that you get from watching the movie is not rival in consumption
a. True b. False Indicate whether the statement is true or false
A system of universal medical insurance would tend to ________ the ________ for medical services
A) increase; elasticity of demand B) decrease; elasticity of demand C) decrease; quantity demanded D) decrease; non-monetary payments