Indicate whether the statement is true, false, or unclear, and justify your answer.A previously uninsured man who enrolls in his workplace health insurance plan after being diagnosed with multiple sclerosis is an example of moral hazard.

The Tucker family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a deductible of $1,000 per person. If one family member has doctor and prescription medication expenses of $2,200, what amount would the insurance company pay?

Indicate whether the statement is true or false, and justify your answer.When insurance is fair, in a sense, it is also free.

High deductible plans in the U.S. reduce adverse selection.  True  False

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3.

Which of the following statements is FALSE regarding the concept of "adverse selection"? Multiple Choice   Adverse selection describes a situation where an individual's demand for insurance is positively correlated with the individual's risk of loss.   Adverse selection occurs when someone increases their exposure to risk when insured. This can happen, for example, when a person takes more risks because someone else bears the cost of those risks.   The relationship between smoking status and mortality provides a good illustration for adverse selection, especially in the case in which a life insurance company did not vary its premiums according to smoking status of its customers.   To counter the effects of adverse selection, insurers may offer premiums that are proportional to a customer's risk.

Indicate whether the statement is true, false, or unclear, and justify your answer.A woman who uses her fireplace only after she buys homeowner’s insurance is an example of moral hazard.

Provide an example of Moral Hazard from personal observation or experience.