
The cost of group health insurance is lower than if an individual buys a policy on his own because
A) the problem of adverse selection is reduced.
B) moral hazard costs of a group tend to move to a low average.
C) it is easier for the company to deny claims from a large group.
D) insuring a group eliminates the problem of buyers having more information than the seller.
Correct Answer:
Verified
Q59: What is adverse selection?
A)It refers to the
Q60: What are the main sources of health
Q61: What is moral hazard?
A)It refers to the
Q62: Which of the following is not an
Q63: Adverse selection occurs in the market for
Q65: If a doctor knows that an insurance
Q66: What is the principal-agent problem?
A)It is a
Q67: Suppose a large firm allows its employees
Q68: Automobile insurance companies have a problem with
Q69: Figure 7-1
![]()
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents