Which of the Following Is an Example of the "Moral

question 14

Multiple Choice

Which of the following is an example of the "moral hazard of health insurance"

• A) an increase in the number of surgeries prescribed for benign prostate disease beyond the point at which the marginal benefit equals the marginal cost
• B) a decreased willingness of individuals to go to the doctor for minor ailments because of increases in coinsurance rates
• C) an underallocation of resources to medical care because of monopoly power of hospitals
• D) experience rating of health insurance groups by health insurers

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Definitions:

Consumer Savings

Refers to the portion of disposable income that is not spent on consumption but is saved by individuals, often placed in savings accounts or invested.

Business Investment

Expenditures made by businesses to purchase capital goods or services intended to increase their productive capacity or efficiency.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Markets

Platforms or systems that facilitate the buying, selling, and trading of financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.