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.