Because Don Has Health Insurance, He Is More Likely to See

question 110

Multiple Choice

Because Don has health insurance, he is more likely to see the doctor when he has a cold. This is an example of

• A) adverse selection.
• B) moral hazard.
• C) both moral hazard and adverse selection.
• D) private information.

---

Definitions:

Labor Costs

Expenses related to the compensation of employees, including wages, salaries, benefits, and taxes associated with labor.

Time Tickets

The form on which the amount of time spent by each employee and the labor cost incurred for each individual job, or for factory overhead, are recorded.

Direct Labor Costs

The total cost of wages for employees who work directly on manufacturing a product or providing a service.

Indirect Labor Costs

Expenses related to labor that cannot be directly tied to a specific product or task, such as salaries of supervisors or maintenance staff.