How Does the Federal Government Avoid the Asymmetric Information Problem

question 16

Multiple Choice

How does the federal government avoid the asymmetric information problem associated with providing health care to people over 65 years of age?

• A) Health care is standardized and is the same for all people over 65 years of age.
• B) Health insurers rely on the reputation of the covered individuals.
• C) Participation in the Medicare program is mandatory for all people over 65 years of age.
• D) Health information about people enrolled in the Medicare program is publically available.

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Definitions:

Heredity and Environment

The two major influences on human behavior and development; heredity relates to the genetic inheritance, and environment refers to the various external factors that impact one's life.

Adult Intelligence Scale

A standardized test designed to measure intellectual and cognitive ability in adults, often used for psychological and educational assessments.

Intelligence Quotient

A score derived from standardized tests designed to measure human intelligence and cognitive abilities.

Normal Distribution

A symmetrical, bell-shaped statistical distribution where most occurrences take place around the central peak and probabilities for values further away from the mean taper off equally in both directions.