Private Information

question 85

Multiple Choice

Private information

• A) can create adverse selection but plays no role in creating moral hazard.
• B) explains why drivers screen auto insurance companies.
• C) means that unless it is overcome, the equilibrium in the market will be a separating equilibrium.
• D) plays a role in the markets for health-care insurance and auto insurance.
• E) cannot explain why the U.S. expenditures on health care per person exceed those in other major nations.

---

Definitions:

Physical Aggression

Acts or behaviors that intend to cause physical harm or injury to another person, often seen in conflicts or as a symptom of underlying conditions.

Sexual Dysfunction

Inability or difficulty in sexual functioning caused by physiological or psychological factors or both.

Antianxiety Medication

Drugs prescribed to relieve anxiety and reduce symptoms of anxiety disorders.

Diaphragm

A dome-shaped muscular partition separating the thorax from the abdomen in mammals, playing a major role in breathing.