Which of the Following Is an Advantage of a Premium

question 36

Multiple Choice

Which of the following is an advantage of a premium support system for Medicare enrollees?

• A) It would impose government's preferences on individuals.
• B) It would promote efficiency by introducing competition.
• C) It would lower overall costs by reducing adverse selection.
• D) It would lower moral hazard by allowing only the healthiest individuals to enroll for Medicare.

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Definitions:

Capital Stock

The total amount of physical goods or assets that a company or country uses in the production of goods and services.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, while holding all other inputs constant.

Factor of Production

A resource utilized in the creation of goods and services that encompasses labor, capital, land, and entrepreneurship.

Revenue

The income that a business receives from its normal business activities, usually from the sale of goods and services to customers.