The adverse selectiOn death spiral, though a firm prediction 0I Akerlof's model, has never been observed in practice. True False

In the markets for used items, there is a natural inclination for adverse selection. This means- Only high quality items are sold.- All items are sold- Only low quality items are sold - A mix of high and low quality items are sold.

The governments role in terrorism insurance is that of  - disinterested observer  - innocent bystander  - a reinsurance provider of last resort/ re-insurer

Consider the following information: Patients who are given Treatment A live for one year in Health State q = 0.8 and certainly live for another year in Health State q = 0.5. Patients who are given Treatment B live for one year in Health State q = 1.0 and then either die with probability 70% or live for another year in Health State q = 1.0 with probability !3! 30%. Which of the following statement is TRUE regarding the abovementioned information? If the second year is discounted at rate r= 0.10 then the expected present value QALYS for treatment A and B is 1.35 and 1.33, respectively. O If the second year is discounted at rate r = 0.10, Treatment A and B yield the same more expected present value QALYS. If the second year is discounted at rate r= 0.10, Treatment A yields more expected present value QALYS. If the second year is discounted at rate r = 0.10 then the expected present value QALYS for treatment A and B is 1.25 and 1.27, respectively. O If the second year is discounted at rate…

Viable organs, while scarce, are readily accessible to extremely wealthy patients for a high price. True False

advanced microeconomics, principal agent

Q.3

Why can a pooling equilibrium be sustained in Spence’s signaling model but not in the Rothschild-Stiglitz screening model? Explain why in both models, the “good” type (high productivity in Spence, or low risk in Rothschild-Stiglitz) lose out in a separating equilibrium.

Calculate absolute and relative risk aversion for U(x)=ln(x) and U(x)=-e-x where wealth is (w)

which of the strategies is effective in reducing moral hazard?  gatekeeping cost sharing prospective payment all of the above