We should expect to see more people in a group to purchase insurance as the probability of illness ___________ and the costs of an illness ____________.

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Part a and b

How does the implementation of universal health care affect the allocation of medical resources in an economy? A. It leads to an overutilization of medical services, potentially causing longer wait. times. B. It reduces the overall cost of healthcare, leading to decreased spending on medical resources. C. It ensures that medical resources are only allocated to the most critical services. D. It increases the administrative costs of healthcare, reducing resources available for patient care.

6. Answer which happens, moral hazard or adverse selection, or nothing happens under each of the following situations. [M20]: A driver drives a car rough because s/he has a property insurance of a car. b. Adverse selection [M21]: Since a driver cannot distinguish among qualities of cars, s/he may buy a bad one. a. Moral hazard c. nothing a. Moral hazard b. Adverse selection c. nothing [M22]: Banks look for lenders, but most customers who apply for loans seem to have difficulty repaying them even in assuming they make an identical effort. a. Moral hazard b. Adverse selection c. nothing