A large company is trying to decide which of two health insurance plans to offer its employees. Plan A has a high monthly premium and a low deductible, and Plan B has a low monthly premium and a high deductible
Adverse selection is likely to be a bigger problem with A) Plan B because it is likely to attract employees who expect high medical costs, and therefore prefer low deductibles.
B) Plan A because it is likely to attract employees who expect high medical costs. Healthier employees who do not expect to have many medical bills will not be willing to pay the high premiums.
C) Plan B because it is likely to attract healthy employees who do not expect to have many medical bills. Because the monthly premiums are low, the insurance company will have a larger financial burden to bear in the event of claims due to serious illness.
D) Plan A because it is likely to attract employees who tend to overuse health care services due to the low deductible. Insurance companies are likely to pay out more in claims than they collect in premiums.
B
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Before the Great Depression of the 1930s, the majority of government spending took place at the ________ and after the Great Depression the majority of government spending took place at the ________
A) federal level; state level B) federal level; state and local levels C) state and local levels; federal level D) local level; federal level
The greater the degree of specialization in the economy, the: a. easier it is to discover a double coincidence of wants
b. more feasible is a barter system. c. less likely it is that monetary exchange will develop. d. harder it is to negotiate an exchange rate between all pairs of goods. e. more likely it is that individual consumers are self-sufficient.