Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 16, Problem 22CTQ
To what sorts of customers would an insurance company offer a policy with a high copay? What about a high premium with a lower copay?
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Chapter 16 Solutions
Principles of Economics 2e
Ch. 16 - For each of the following purchases, say whether...Ch. 16 - Why is there asymmetric information in the labor...Ch. 16 - Why is it difficult to measure health outcomes?Ch. 16 - Why might it be difficult for a buyer and seller...Ch. 16 - What do economists (and used-car dealers) mean by...Ch. 16 - What are some ways a seller of goods might...Ch. 16 - What are some ways a seller of labor (that is,...Ch. 16 - What are some ways that someone looking for a loan...Ch. 16 - What is an insurance premium?Ch. 16 - In an insurance system, would you expect each...
Ch. 16 - What is an actuarially fair insurance policy?Ch. 16 - What is the problem of moral hazard?Ch. 16 - How can moral hazard lead to more costly insurance...Ch. 16 - Define deductibles, copayments, and coinsurance.Ch. 16 - How can deductibles, copayments, and coinsurance...Ch. 16 - What is the key difference between a...Ch. 16 - How might adverse selection make it difficult for...Ch. 16 - What are some of the metrics economists use to...Ch. 16 - You are on the board of directors of a private...Ch. 16 - A website offers a place for people to buy and...Ch. 16 - How do you think the problem of moral hazard might...Ch. 16 - To what sorts of customers would an insurance...Ch. 16 - Using Exercise 16.20, sketch the effects in parts...
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- How can insurance companies offer a guarantee to pay for certain medical expenses? How do they determine the appropriate premium to charge?arrow_forwardDavid Herbert earns $2,475 a month as a security guard for Baldwin Enterprises. His group medical insurance costs $3,300 a year. The company pays 80% of the cost of group insurance. How much is deducted each month from his paycheck for medical insurance?arrow_forwardwhat was the relationship between the premiums, deductibles, and coverage limits for your insurance coverage?arrow_forward
- How can you use Microsoft Excel and your agility and problem solving skills to understand the level of risk involved in selecting the appropriate insurance to achieve your goals. How will problem solving, productivity, technology, and agility help you achieve your personal and professional goals?arrow_forwardNathan's income in a typical year is 75,000. There is a 10 percent chance that Nathan will be seriously ill next year, incurring 15,000 in medical expenses. Samantha also earns 75,000 in a typical year. Her chance of becoming seriously ill next year and incurring ur 15,000 in medical expenses is 20 percent. a. Calculate the actuarially fair premium for full insurance for (i) Nathan and (ii) Samantha. b. Suppose that a private insurance firm cannot distinguish between Nathan and Samantha in terms of their risk and assumes the risk of being seriously ill in the general population is 10%. In this context, discuss the adverse selection problem the firm might face. c. Can a compulsory, government - run health insurance program avoid the problem of adverse selection? Explain why or why not.arrow_forwardExplain the purpose of insurance. If a mother purchases health insurance for her and her four (4) children, who is the policyholder, and who is (are) the beneficiaries?arrow_forward
- Insurance needs change throughout a person’s lifecycle because people’s needs change. True or Falsearrow_forwardExplain the different between takaful and insurance.arrow_forwardRobert decides to start working for the local ridesharing company. He has a large 12-passenger van and thinks he will be in big demand at the airport. He tells his personal car insurance company that he is driving for a ridesharing company, and he needs some additional insurance. He is denied additional coverage. Why? There is no such thing as ridesharing insurance. He lives in a state that doesn’t offer ridesharing insurance. The city he lives in is too small for him to qualify for ridesharing insurance. Many insurance companies will not insure high-occupancy vehicles under their ridesharing policies.arrow_forward
- What kind of insurance pays for you to be in a nursing home? O Health insurance O Disability insurance O Long-term care insurance O Liability insurancearrow_forwardUsing an appropriate graph explain how tax exemption affects insurance coverage.arrow_forwardIs Healthcare like any other commodityarrow_forward
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