Because People with Hidden Health Problems Are More Likely to Buy

question 103

Multiple Choice

Because people with hidden health problems are more likely to buy health insurance than are other people,

• A) the price of health insurance reflects the costs of a sicker-than-average person.
• B) the price of health insurance is too low, relative to the socially-optimal price.
• C) people in average health may be encouraged to buy too much health insurance, relative to the socially-optimal quantity.
• D) the Condorcet Paradox suggests that people who are sicker than average will ultimately buy more health insurance.

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Definitions:

Modified Accrual

An accounting method blending cash and accrual basis accounting, recognizing revenues when they are measurable and available, and expenses when incurred.

Government Reporting

The process of preparing and disclosing financial and performance information by government agencies, essential for accountability and transparency.

Full Accrual

Refers to an accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash transactions occur.

PSAB

Public Sector Accounting Board, which sets accounting standards for public sector entities in Canada.