Identify each of the following as an adverse selection or a moral hazard problem: a. A person with car insurance fails to lock his car doors when he shops at a mall. b. A person with a family history of cancer purchases the most complete health coverage available. c. A person with health insurance takes more risks on the ski slopes of Aspen than he would without health insurance. d. A college professor receives tenure (assurance of permanent employment) from her employer. e. A patient pays his surgeon before she performs the surgery.

BuyFind

Microeconomics

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617406
BuyFind

Microeconomics

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617406

Solutions

Chapter
Section
Chapter 17, Problem 15QP
Textbook Problem

Identify each of the following as an adverse selection or a moral hazard problem:

  1. a. A person with car insurance fails to lock his car doors when he shops at a mall.
  2. b. A person with a family history of cancer purchases the most complete health coverage available.
  3. c. A person with health insurance takes more risks on the ski slopes of Aspen than he would without health insurance.
  4. d. A college professor receives tenure (assurance of permanent employment) from her employer.
  5. e. A patient pays his surgeon before she performs the surgery.

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Chapter 17 Solutions

Microeconomics

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