In the health insurance field, asymmetric information creates problems _____ insurance contracts are signed; moral hazard causes problems_____ insurance contracts are signed.
A)Before; before
B)Before; after
C)After; after
D)After; before

Question

In the health insurance field, asymmetric information creates problems _____ insurance contracts are signed; moral hazard causes problems_____ insurance contracts are signed.
A)​Before; before
B)​Before; after
C)​After; after
D)​After; before

Quizplus · Accepted Answer

Asymmetric information is an issue before insurance contracts are signed because one party (usually the insured) has more or better information than the other (the insurer), affecting the terms of the contract. Moral hazard occurs after contracts are signed, as the insured might take greater risks knowing they are covered by insurance.

In the Health Insurance Field, Asymmetric Information Creates Problems _____