How does Moral Hazard affect the demand for health
insurance?
How does Moral Hazard affect the demand for health
insurance?
Solutions
Expert Solution
Moral hazard is the situation of taking mor risk when it is
insured by third party.Thus moral hazard situation will lead to
increase in demand for health insurance
Because of the persistent moral hazard problem, the demand curve
tends to _________________ as health insurance companies face
increasing financial risks associated with the costly but
unforeseen healthcare overutilization of their
insureds.
Group of answer choices
- none of the choices listed here
- slope down
- slope up
- slope up and down
- slope flatly
Question 1
How does consumer moral hazard affect market equilibrium?
It shifts the demand curve to the right, thereby increasing
both the quantity of health care used and the price of health
care.
It shifts the demand curve to the right, thereby increasing the
quantity of health care used, but its affect on the price of health
care is ambiguous.
It shifts the demand curve to the right, thereby increasing the
quantity of health care used and decreasing the price...
Explain how moral hazard and adverse selection each affect
insurance markets. For concreteness, focus on the auto insurance
market. What are the implications of these concepts for the kinds
of policies that are available for consumers? How do insurers and
markets try to “solve” or overcome the issues presented by these
concepts? Use graphical analysis when appropriate.
QUESTION 37
Health insurance is subject to
a.
moral hazard problems but not asymmetric information
problems
b.
Asymmetric information problems but not moral hazard
problems
c.
Both asymmetric information problems and moral hazard
problems
d.
Neither asymmetric information problems nor moral hazard
problems
QUESTION 38
A price index can fall from one year to the next:
a.
even when nominal GDP falls.
b.
even when real GDP falls.
c.
even when...