Why do health insurance companies ask their potential customers to submit their previous medical records?
What will be an ideal response?
Customers of health insurance companies have better information about their health conditions than do the insurers. In order to reduce this information asymmetry, potential customers are often asked to submit their previous medical records. This is an example of signaling by customers.
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When the production possibilities curve is bowed out, resources are:
a. equally well-suited to production of both goods. b. not being used efficiently. c. not equally suited to the production of both types of goods. d. increasing as more of one good is produced. e. of an inferior quality.
Country A and country B initially have the same per capita income. Suppose that A sustains an annual growth rate of 3.5 percent, while the annual growth rate of country B is 1.75 percent. The "rule of 70" indicates that after forty years, the per capita income of country A will be approximately ____ that of country B
a. one-half b. 70 percent greater than c. twice d. four times