Before selling anyone a health insurance policy, theKramer Insurance Company requires that applicantsundergo a medical examination. Those withsignificant preexisting medical problems are chargedmore. This is an example ofa. moral hazard.b. adverse selection.c. signaling.d. screening.

Before selling anyone a health insurance policy, theKramer Insurance Company requires that applicantsundergo a medical examination. Those withsignificant preexisting medical problems are chargedmore. This is an example ofa. moral hazard.b. adverse selection.c. signaling.d. screening.

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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Question

Before selling anyone a health insurance policy, the
Kramer Insurance Company requires that applicants
undergo a medical examination. Those with
significant preexisting medical problems are charged
more. This is an example of
a. moral hazard.
b. adverse selection.
c. signaling.
d. screening.

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