The Law of Increasing Additional Costs Is Due to

question 306

Multiple Choice

The law of increasing additional costs is due to

• A) government regulations.
• B) technological improvements.
• C) the fact that it is more difficult to use resources efficiently the more society produces.
• D) the fact that resources are not perfectly adaptable for alternative uses.

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Definitions:

Individual Mandate

A requirement that individuals purchase or otherwise obtain health insurance, or face penalties, aimed at expanding healthcare coverage.

Health Insurance

Insurance that reimburses the policyholder for expenses related to medical and surgical care.

Community Rating

An insurance pricing strategy which sets premiums based on the collective risk profile of a community or geographic area rather than individual risk factors, often used in healthcare insurance.

Adverse Selection

A situation in which asymmetric information leads to a selection of undesirable outcomes, such as in insurance markets.