Suppose that there are two employers in Tinytown.CareCo offers a generous health insurance package to all employees while ApathyInc pays slightly higher wages,just sufficient to pay for health coverage for a person in average health.
What is likely to be true of the employees at each firm?

Question

Quizplus · Accepted Answer

Since CareCo offers a generous health insurance package, it is likely to attract employees who have greater healthcare needs or who prioritize having health coverage. In contrast, ApathyInc pays slightly higher wages, which may appeal to healthier individuals who do not necessarily need extensive healthcare coverage. Therefore, it is likely that less healthy people will work for CareCo, while healthy ones will work for ApathyInc.

Suppose That There Are Two Employers in Tinytown