Private Information

question 85

Multiple Choice

Private information

• A) can create adverse selection but plays no role in creating moral hazard.
• B) explains why drivers screen auto insurance companies.
• C) means that unless it is overcome, the equilibrium in the market will be a separating equilibrium.
• D) plays a role in the markets for health-care insurance and auto insurance.
• E) cannot explain why the U.S. expenditures on health care per person exceed those in other major nations.

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Definitions:

Cephalocaudal

A pattern of growth and development in which progress is made from the head downward, typically observed in infants.

Maturational

Pertaining to the process of maturing or developing to a more advanced stage, often in the context of biological or psychological growth.

Consequents

The outcomes or results that logically follow given premises in a conditional statement.

Antecedents

In logic and grammar, the elements that precede or serve as a condition to other elements, often referring to the first part of a conditional statement.