The problem of moral hazard in health insurance _____
a. drives up health care costs
b. exacerbates the adverse selection problem
c. can cause individuals to be more careful
d. creates incentives to diet and regular exercise
a
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A price ceiling set below the equilibrium price will
A) clear the market for the good. B) result in a shortage of the good. C) result in a surplus of the good. D) induce new firms to enter the industry.
A firm that is a monopolist in the output market and a monopsonist in the input market
A) will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage. B) will restrict the level of output but not that of employment compared to the perfectly competitive case. C) will hire less labor but pay the same wage compared to the perfectly competitive case. D) will hire less labor and pay a lower wage compared to the perfectly competitive case.