With respect to the health insurance market, what is moral hazard?
A) Moral hazard refers to the actions people take, after they purchase an insurance policy, that make the insurance company worse off.
B) Moral Hazard refers to to people who purchase one type of insurance policy when they would have been better off purchasing a different policy.
C) Moral Hazard refers to the situation in which a person purchasing an insurance policy takes advantage of knowing more about his health than the insurance company.
D) Moral hazard refers to the actions people take before they purchase an insurance policy.
A
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A firm's long run cost is the cost of production when the firm
A) calculates its cost at least one year into the future. B) adds together all of its short run costs. C) uses the economically efficient quantities for its plant and its labor. D) can vary the amount of output it produces.
If a firm's product is perishable, where is the firm usually located?
(A) Near a river (B) In a city (C) Near its suppliers (D) Near its consumers