The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance. By offering health insurance to all U.S. citizens with
pre-existing medical conditions, the Pre-Existing Condition Insurance Plan eliminates ________ for both the insurer and the insured, and eliminates ________ for the issuer of the insurance policy.
A) the principal-agent problem; moral hazard
B) asymmetric information; adverse selection
C) adverse selection; the principal-agent problem
D) moral hazard; adverse selection
Answer: B
You might also like to view...
If perfect competition existed everywhere, along with frictionless exchange, perfect information, and constant returns to scale,
a. consumers would carry out transactions directly with resource suppliers b. firms would not have the information necessary to calculate marginal productivities of resources c. entrepreneurs would be needed to collect information d. consumers would produce output and then engage in barter e. the economy would be organized into one large firm
A tariff on a product
a. enhances the economic well-being of the domestic economy. b. increases the domestic quantity supplied. c. increases the domestic quantity demanded. d. results in an increase in producer surplus that is greater than the resulting decrease in consumer surplus.
A policy intended to reduce unemployment by taking advantage of a tradeoff between inflation and unemployment leads to
a. both higher inflation and higher unemployment in the long run. b. higher inflation and no change in unemployment in the long run. c. the same inflation rate and lower unemployment in the long run. d. higher inflation and lower unemployment in the long run
What does it mean to "think at the margin"? How is thinking at the margin related to determining best choices?
What will be an ideal response?