The fact that someone with a high risk of medical problems is likely to buy a large amount of health insurance is an example of
A) adverse selection.
B) monitoring.
C) moral hazard.
D) screening.

Question

Quizplus · Accepted Answer

Adverse selection is the tendency for people with a higher risk of a negative event (in this case, medical problems) to be more likely to purchase insurance. This can lead to an imbalance in the risk pool, where insurers end up covering a disproportionate number of high-risk individuals, resulting in higher costs for the insurer and potentially higher premiums for everyone.

The Fact That Someone with a High Risk of Medical