How is moral hazard related to health care?
What will be an ideal response?
Moral hazard is affiliated with many insurance systems. A person who is insured will use health care services more than one who is not insured and may engage in a lifestyle that is less healthful than one with less insurance. These create greater costs to the insurance companies and the health care system. Physicians also are more likely to require tests when insurance companies pick up the costs.
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Assume there are only two individuals in an economy, Lisa and Bart. The utility possibilities frontier for these individuals is given as:
120 = UL + UB where UL is Lisa's utility and UB is Bart's utility. Lisa's current level of utility is 20, Bart's level of utility is 90. This combination is: A) inefficient. B) economically efficient. C) impossible, because it is outside of the welfare frontier. D) none of the above
Total income in the United States is comprised of
a. wages only. b. wages and fringe benefits only. c. rents, profits, and interest payments only. d. wages, fringe benefits, rents, profits, and interest payments.