Travel insurance (which pays a traveler if the traveler needs to cancel his or her trip) has a clause that states it will not pay if the trip is cancelled because of a pre-existing condition
If sick people are more likely to purchase travel insurance, this clause is meant to A) reduce moral hazard.
B) reduce adverse selection.
C) increase moral hazard.
D) increase adverse selection.
B
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After getting an A on your economics exam, you decide to go to your favorite Mexican restaurant to celebrate. You are having trouble deciding whether to order the chipotle chicken chimichanga or the cilantro seafood enchiladas
Use the rule of equal marginal utility per dollar to determine which one to purchase: (a) the chimichanga for $8 which gives you 120 units of utility, or (b) the enchiladas for $15 which gives you 195 units of utility?
If the United States government wants to eliminate an unfavorable balance of trade, it could
a. reduce tariffs b. encourage imports c. reduce quotas on imports d. depreciate the dollar e. increase taxes on exported goods