How can a health insurance mandate help in reducing the problem of adverse selection in the health insurance market?
What will be an ideal response?
The problem of adverse selection occurs in the health insurance market when low-risk individuals stay out of the market due to high premiums. A large number of high-risk individuals in the market further increases the premium causing only high-risk individuals to remain in the market. A health insurance mandate, which requires everybody to purchase a basic insurance plan, implies that low-risk individuals cannot opt out of the market and thus prevents the chain of events triggered by adverse selection.
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The minimum point on the marginal cost curve corresponds to the:
a. maximum point on the total cost curve. b. minimum point on the total cost curve. c. inflection point on the total variable cost curve. d. midpoint of the total cost curve.
Which of the following can be a valid reason for Canada's GDP exceeding its GNP in 2001?
a. Net factor income from abroad in Canada was negative. b. Canada's GNP measurements were flawed. c. Canada's indirect business taxes were exceptionally high. d. The World Bank underestimated Canada's net exports. e. Canada's residents received more foreign aid than they could spend.