What Would Be the Consequence for Patients of a Law

question 81

Multiple Choice

What would be the consequence for patients of a law that limited the amount of annual profit a health insurance company could earn?

• A) The principal-agent problem would become less severe.
• B) The adverse selection problem would become more severe.
• C) The moral hazard problem would become more severe.
• D) The adverse selection problem would become less severe.
• E) The moral hazard problem would become less severe.

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Definitions:

Property, Plant, and Equipment

Property, Plant, and Equipment (PP&E) are tangible assets that are expected to be used in operations for more than one period.

Patent

An exclusive right to sell or produce one’s discovery or invention. A patent is good for 20 years.

Copyright

The exclusive right that is granted by the federal government to sell and reproduce literary, musical, or artistic works for a period of time.

Plant Asset

Long-term tangible assets that are used in the operations of a business and are not intended for sale, such as machinery, buildings, and equipment.