Adverse Selection for Sellers: Insurance
1) Health insurance companies face an asymmetric information problem because:
A) companies have superior information concerning the risk of illness or injury of those insured.
B) buyers have superior information concerning their risk of illness or injury.
C) the insurance companies and buyers both have equal information concerning the risk of illness or injury of those insured.
D) the probability of becoming ill or injured is unrelated to the insured person's occupation.
2) Adverse selection occurs in the health insurance market because:
A) it is difficult for insurance companies to distinguish between high risk and low risk customers.
B) people cannot predict their future health status.
C) the least healthy people are the least likely to acquire insurance.
D) health care markets are unregulated.
3) One consequence of imperfect information in the health insurance market is that:
A) less healthy individuals are more likely to buy insurance, driving up the cost of insurance for everyone.
B) the most healthy individuals are more likely to buy insurance, leaving the least healthy without access to health care.
C) health insurance increases the demand for health care and so increases the price of health care.
D) unhealthy individuals are denied health insurance.
4) In the used car market, the less-informed party is the ________. In the health care market, the less-informed party is the ________.
A) buyer; seller
B) seller; buyer
C) buyer; government
D) seller; government
5) If workers have better information about their own ability to work than employers do, which of the following situations is present?
B) asymmetric information
D) moral hazard
6) Suppose a health insurance company notes that almost all of its customers are at a high risk of illness or injury. This is an example of:
A) public information.
B) perfect information.
C) a thick market.
D) an adverse selection problem.
Suppose we want to design a new placebo controlled trial to elevate an experimental medication to increase lung capacity. The primary outcome is peak expiratory flow rate...Apr 23 2020
The information below pertains to October production at Zippy Company’s bottling plant, which produces and bottles sports drinks.UnitsMaterialsConversionWork in process, ...Jun 27 2020
Change in allele frequency of a population is called ________.a. macroevolutionb. adaptive radiationc. inbreedingd. microevolutionJun 05 2021
Spring Designs Decorators issued a 180-day, 6% note for $76,800,dated April 13 to Jaffe Furniture Company on account. Required: A.Determine the due date of the note. B. D...May 27 2021
A female client who is 32 years of age has been diagnosed with stage 1 hypertension. The client’s height is 5 feet 5 inches (165 cm), and her weight is recorded as 125 p...Aug 11 2021
x = e^v sec u, y = e^y tan u, find Jacobian and inverse jacobian. >Aug 05 2020
On 1/01/16 Chandler Corp. purchased 100% of the stock of Hosterman Corp. (80,000 shares) for $4,800,000. Hosterman continues to operate as a separate legal corporation. H...Aug 02 2021
In the following figure, the diameter of the circle is 3 cm. AB and MN are two diameters such that MN is perpendicular to AB. In addition, CG is perpendicular to AB such ...Aug 09 2020
The Helium Contract That TankedFACTSSVC-West, L.P., did time-share presentations at hotels and ordered helium tanks quite often for balloons. SVC placed a rush order with...Jul 26 2021
The Fourth Amendment requires that probable cause exist before a defendant is arrested or searched. Which of the following levels of evidence is necessary to show probabl...Aug 21 2021