Which of the following additions to an insurance contract will not act to reduce moral hazard?
A. Co-payments for covered costs.
B. Deductibles for covered costs, that is, the first X dollars of claims are paid by the insured.
C. Cost caps, that is, limitations on total payments that can be made from a claim.
D. Age limitations on who can be insured.
Answer: D
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Suppose the equilibrium rent in Denver is $1,050. A rent ceiling of $755 per month leads to
A) a surplus of apartments in Denver. B) a shortage of apartments in Denver. C) no change in the Denver apartment market. D) fair prices in the Denver market. E) compared to the situation at the equilibrium rent, a decrease in the quantity of apartments demanded and an increase in the quantity of apartments supplied.
The fast-food restaurant industry would be an example of which market model?
A. Monopolistic competition B. Pure competition C. Pure monopoly D. Oligopoly