Questions and Answers
Which of the following is an example of moral hazard?
Tom not communicating the cost sharing with his employees
Which of the following is an example of adverse selection?
Sophie believing her landlord's insurance will cover any losses
What can be the potential consequence of adverse selection in insurance?
Higher premiums for low-risk individuals
What is the main reason why Tom's employees become less motivated to stay healthy or shop around for medical care?
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Why does Sophie decide not to purchase renter's insurance?
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