QUESTION 12Under realistic conditions, optimal social insurance systems should:O a. not insure individuals against adverse events.O b. partially, but not completely, insure individuals against adverse events.O c. completely insure individuals against adverse events.O d. prevent adverse events.QUESTION 13When no private market for insurance exists, social insurance programs makeO a. consumption smoothingOb. self-insuranceOc. adverse selectionOd. moral hazardQUESTION 14Moral hazard leads to workers with workers' compensation to set the wage:O a. above the marginal value of leisure.Ob.equal to the workers' compensation payment.O c. above their marginal product.O d. equal to the marginal value of leisure.QUESTION 15In the United States, private insurance exists in each of these product areas EXCEPT:a. auto insurance.b. life insurance.Oc. casualty and property.d. Medicare.possible.QUESTION 16Adrianne is buying a life insurance policy and the underwriter asks her to allow the company to access all her medical records. What is theunderwriter concerned about?a. adverse selectionO b. rent seekingO c. moral hazardO d. X-inefficiency

A government-run programme known as social insurance protects people and families from economic…

QUESTION 12 Under realistic conditions, optimal social insurance systems should: O a. not insure individuals against adverse events. O b. partially, but not completely, insure individuals against adverse events. O c. completely insure individuals against adverse events. O d. prevent adverse events.

QUESTION 12 Under realistic conditions, optimal social insurance systems should: O a. not insure individuals against adverse events. O b. partially, but not completely, insure individuals against adverse events. O c. completely insure individuals against adverse events. O d. prevent adverse events.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Short questions a. Describe the first and second Welfare Theorem b. Describe the difference between risk aversion, risk neutrality and risk prefering c. Describe and explain the non-satiation assumption d. Describe and explain the difference between adverse selection and moral hazard e. Describe and explain the difference between income effect and substitution effect
3. Consider the adverse selection model of health insurance. ● (a) Why is the marginal cost curve negatively sloped?
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PRINCIPLE OF HEALTHCARE FINANCE
(d) Suppose Antonio has utility function over wealth given by Va (y) = Vy and suppose Dillon has the following utility function over wealth: va (y) = In %3D Who is more risk aversc, Antonio or Dillon? Show this using two approachcs. (e) Who is more risk averse, Chelsca or Dillon'? Explain.
John is a 55-year-old male smoker, about 50 pounds overweight, who has high blood sugar and drinks to excess. Because of adverse selection in health insurance, Select one: O a. when John gets health insurance, he will be less likely to take care of himself. O b. if John doesn't have health insurance already, he will not be able to get it. O c. when John gets health insurance, he will be more likely to take care of himself. O d. John is more likely to buy health insurance than the average person since premiums are based on the average risk. O e. John is less likely to buy health insurance than the average personsince premiums are based on the average risk.