An Implication of Asymmetric Information in the Insurance Market Is

question 78

Multiple Choice

An implication of asymmetric information in the insurance market is that:

• A)insurance companies have perfect knowledge about the health problems of those who purchase insurance
• B)the price of health insurance may reflect the costs of a healthier-than-average person
• C)people with greater hidden health problems are more likely to buy health insurance than other people
• D)people in average health are encouraged to purchase health insurance

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Definitions:

Token Economy

A reinforcement strategy in behavior therapy, where desirable behaviors are rewarded with tokens that can be exchanged for privileges or desired items.

Classical Conditioning

An instructional process where repeated association between two stimuli results in the response initially triggered by the second stimulus being provoked by the first stimulus alone.

First-Generation Antipsychotic

A class of antipsychotic medications developed in the mid-20th century, used primarily to treat psychotic disorders like schizophrenia.

Synergistic Effect

An interaction between two or more substances or processes that results in an effect that is greater than the sum of their individual effects.