Individuals with an Expensive Pre-Existing Condition Are More Likely to Purchase

question 10

Multiple Choice

Individuals with an expensive pre-existing condition are more likely to purchase health insurance, which exemplifies _____. Individuals who have health insurance visit the doctor more frequently than individuals who are uninsured, which exemplifies _____.

• A)moral hazard; adverse selection
• B)adverse selection; moral hazard
• C)statistical discrimination; adverse selection
• D)adverse selection; the principal-agent problem

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Definitions:

Psychopathology

The study of mental disorders, or a term for the mental disorder itself.

Psychological Illness

A disorder characterized by disturbances in a person's thoughts, emotions, or behavior.

Hysterics

Outdated term referring to exaggerated or uncontrollable emotion or excitement; now more commonly related to conversion disorder in psychology.

Psychogenic

Originating in the mind or in mental or emotional conflict.