TQuestion 1 - All else equal, a car insurance plan that offers less full insurance coverage will produce less moral hazard. O. True O. False Question 3 - Many states have laws requiring health insurance policies cover the treatment of diabetes. One study found that after the passage of these laws, diabetics weight increased, which complicates the treatment. This is an example of moral hazard. O. True O. False

TQuestion 1 - All else equal, a car insurance plan that offers less full insurance coverage will produce less moral hazard. O. True O. False Question 3 - Many states have laws requiring health insurance policies cover the treatment of diabetes. One study found that after the passage of these laws, diabetics weight increased, which complicates the treatment. This is an example of moral hazard. O. True O. False

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter8: Market Failure

Section: Chapter Questions

Problem 10P

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For each of the following purchases, say whether you would expect the dogma of imperfect information to be relatively high or relatively low: Buying apples at a roadside stand Buying dinner at the neighborhood restaurant around the comer Buying a used laptop computer at a garage sale Ordering flowers over the internet for your friend in a different city
12. True or False? Medicaid is a U.S. federal- and state- government-sponsored insurance program that provides insurance to people under age 65 whose incomes fall below a certain threshold (level). O True O False
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The goal of health insurance is to O spread financial risk over a large group of people O equally distribute the probabifity of loss over a large number of people collect sufficient premiums to cover all possible losses O equalize the availability of medical care across population groups O redistribute income from the sick to the healthy
In economic terms, moral hazard is the negative relationship between the out-of-pocket price of the physician visit and the quantity of the physician visits demanded in a given time period. a.True b.False
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For each of the following kinds of insurance, give anexample of behavior that can be called moral /raumtand anotJ,cr example of behavior that can be calledadverse selection.a. health insuranceb. car insurancec. tile insurance
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An individual has 40,000 in income per year. The person will get sick with probability 0.1. If he does get sick, the medical bills will total 30,000. The following tables shows the utility derived from certain amounts of income: Income Utility40,000 20037,000 19535,000 19030,000 17020,000 14010,000 100Considering the probability of illness, what is the expected utility of income without insurance? Show your work.
14. Chapter ma?pe09r, Section 22, Problem 025 (ID: 025.22.MANK09) People with hidden health problems are more likely to buy health insurance than are other people. This is an example of Ca. adverse selection and makes the cost of health insurance lower than otherwise. Ob. adverse selection and makes the cost of health insurance higher than otherwise. Oc. moral hazard and makes the cost of health insurance lower than otherwise. Od. moral hazard and makes the cost of health insurance higher than otherwise.
a. What is the arc price elasticity of demand for healthcare consumers in Japan using only this data? b. Using your estimated elasticity, what would the demand for health care be if the price in tokyo were raised to 30 per visit? What would the demand in Hokkaido be if the price were lowered to 5 per visit? Region Outpatient visits Price/ visit Tokyo 1.25/ month 20Y Hokkaido 1.5/ month 10Y