Which of the Following Parties Is Likely to Have the Most

question 53

Multiple Choice

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

• A)the company that issues the health insurance policy
• B)the individual who is applying for the health insurance policy
• C)the employer of the individual who is trying to purchase the health insurance policy
• D)All parties in the health insurance market have access to the same level of information.

---

Definitions:

Marginal Cost

The growth in complete cost caused by the manufacture of one more unit of a good or service.

Artificially Scarce Good

A product or service whose availability is limited due to artificial constraints, such as legal restrictions or monopolistic practices, rather than natural scarcities.

Competitive Market

A market structure where many firms offer products or services that are similar, allowing consumers to find substitutes easily.

Efficient Price

A market price that reflects all available information and results in an allocation of resources that maximizes overall utility.