Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 16, Problem 6Q
To determine
Reasoning for payment of efficiency wages by firms and the relationship that the efficiency wages has with moral hazard.
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What would explain why moral hazard might not occur after the large gains in health insurance coverage?
Chapter 16 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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- If the theory of moral hazard is correct, how would you expect the gains in insurance coverage to affect health behaviors such as smoking, drinking, exercise, and healthy eating habits? What would explain why moral hazard MIGHT NOT occur after the large gains in health insurance coverage?arrow_forwardA Grab driver who does not own the car is very harsh on his driving as he knows that the car is not his. Is this an example of a moral hazard problem? How does moral hazard issue arise?arrow_forwardIn economics, what is an example of monitoring?arrow_forward
- How do you think the problem of moral hazard might have affected the safety of sports such as football and boxing when safety regulations started requiring that players wear more padding?arrow_forwardWhat is the significance when it comes to moral hazard to show it's efficient function of a medical market?arrow_forward"If the production of health care generated positive externalities, the welfare costs of moral hazard would be smaller than suggested by M. Pauly's analysis." Is this statement true, or false? Use a graph to illustrate your answer.arrow_forward
- give an example of an existing economic interaction that exhibits moral hazard. describe the setting and talk about efficiency considerations.arrow_forwardWhich of the following is NOT an example of moral hazard? an insured person not using preventive care, because he/she is insured against illness an uninsured patient incessantly visiting his doctor because he always thinks he is getting sick an insured person buying prescription shampoo because it covered an insured person getting their teeth whitened because it is coveredarrow_forwardIf people get higher pay from insurance than their premiums, will this increase or decrease the death rate of average persons? Is this an example of moral hazard or adverse selection? How will an insurance company deal with these problems?arrow_forward
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