Indicate whether the statement is true or false, and justify your answer.Under the typical assumptions of the Rothschild–Stiglitz model, there is nothing that an insurance company can do to distinguish between robust and frail customers.

Which of the following statements is FALSE regarding the concept of "adverse selection"? Multiple Choice   Adverse selection describes a situation where an individual's demand for insurance is positively correlated with the individual's risk of loss.   Adverse selection occurs when someone increases their exposure to risk when insured. This can happen, for example, when a person takes more risks because someone else bears the cost of those risks.   The relationship between smoking status and mortality provides a good illustration for adverse selection, especially in the case in which a life insurance company did not vary its premiums according to smoking status of its customers.   To counter the effects of adverse selection, insurers may offer premiums that are proportional to a customer's risk.

Indicate whether the statement is true or false, and justify your answer.Even though it is illegal for sickness funds to deny coverage to individuals, insurers still often engage in risk selection.

Indicate whether the statement is true or false, and justify your answer.There is great emphasis in the Beveridge model on equitable care for all; therefore it is illegal for private insurance to be sold.

Multiple Choice   Adverse selection describes a situation where an individual's demand for insurance is positively correlated with the individual's risk of loss.   Adverse selection occurs when someone increases their exposure to risk when insured. This can happen, for example, when a person takes more risks because someone else bears the cost of those risks.   The relationship between smoking status and mortality provides a good illustration for adverse selection, especially in the case in which a life insurance company did not vary its premiums according to smoking status of its customers.   To counter the effects of adverse selection, insurers may offer premiums that are proportional to a customer's risk.

Indicate whether the statement is true or false, and justify your answer.To date, no major health insurance experiment has studied the impact of uninsurance, just different levels of insurance.

Describe how employers “choose” the optimal length of a strike in a model where there is asymmetric information.

Indicate whether the statement is true or false, and justify your answer.Patients are charged premiums based on their risk rating.

Indicate whether the statement is true or false, and justify your answer.Private markets are powerless to combat adverse selection, so the only solution is a government-mandated insurance contract.