ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw

Exercise 4

Some AIDS activists believe that health insurance companies should not be allowed to ask applicants if they are infected with the HIV virus that causes AIDS. Would this rule help or hurt those who are HIV-positive? Would it help or hurt those who are not HIV-positive? Would it exacerbate or mitigate the problem of adverse selection in the market for health insurance? Do you think it would increase or decrease the number of people without health insurance? In your opinion, would this be a good policy? Explain your answers to each question.