1.When insured baseball player Coco Baezgot hit on the hand by a fastball, he was given the option of 3 treatments.

Comparatively each treatment is as effective as the other. The only difference is cost. Treatment C is the most expensive

and Treatment A is the cheapest. Mr. X has full insurance and he chooses Treatment C. This is an example of

Group of answer choices

a. adverse selection

b. none of the choices

c. ex-ante moral hazard

d. ex-post moral hazard

e. not an example of moral hazard

2. Everything else equal(in terms of copays,coinsurance rates,and deductibles),Policy A has a gatekeeper while Policy B does not.Which policy will most likely result in greater moral hazard?

Group of answer choices

a. Policy B

b. both policies will not yield any moral hazard

c. both policies will yield the same level of moralhazard

d. none of the choices

e. Policy A

3.Coinsurance rate for Policy C is 30%while coinsurance rate for Policy D is25%.Which of the these 2 will most likely provide a LOWER moral hazard?

Group of answer choices

a. Policy C

b. differentcoinsurancerates do not affect moral hazard implications

c. both will provide exactly the same level of moral hazard

d. Policy D

e. none of the choices

4.Rudy and Donovan'shealth insurance policies are identical except for the deductibles. Rudy's deductible is $1,000 while Donovan'sdeductible is $2,000. Which policy is likely to instigate greater social loss due to moral hazard?

Group of answer choices

a. Donovan'spolicy

b. Rudy's policy

c. although Rudy's policywill encourage moral hazard more, the social loss resulting from it will be less than Donovan'spolicy.

d. none of the choices

e. both policies will provide the same level of social loss

5.moral hazard causes:

a. Group of answer choices

b. probability of getting sick to increase

c. probability of NOTgetting sick to increase

d. premiums to decrease

e. probability of getting sick to decrease

6.Mike has a doctor's visit copay of $70 whileDonald'ddoctor's visits requirea copay of $75. Assume their policies are identical except on copays. Whose policy provides a lower social loss?

Group of answer choices

a. both policies provide the exactly the same level of social losses

b. Donald

c. none of the choices

d. MIke

7.Three policies are identical except for the deductibles.Ivana'spolicy has adeductible of $1,000, Marla's policy has a deductible of $500, and Melania's policy has a deductible of $2,000. Who has the lowest potential for moral hazard?

Group of answer choices

a. Ivana

b. Ivanka

c. Melania

d. Marla

e. Eric

8.The Ideal Health Level (IHL) theory of health insurance is consistent with which statement?

Group of answer choices

a. all care is preventative

b. having insurance may not cause moral hazard if the ideal quantity (IHL) is below quantity of health care demanded without insurance

c. having insurance will always cause a moral hazard

d. having insurance may not cause moral hazard if the ideal quantity (IHL) is above quantity of health care demanded without insurance

8.Nyman's theory of insurance assumes

Group of answer choices

a. having insurance may not cause moral hazard

b. having insurance will always cause inefficient moral hazard

c. having insurance may create inefficient moral hazard if the additional health care service acquired is really needed by the patient

d. having insurance may create efficient moral hazard if the additional health care service acquired is NOT really needed by the patient

e. having insurance may create efficient moral hazard if the additional health care service acquired is really needed by the patient

9.Which of the following is a positive impact of moral hazard through insurance?

Group of answer choices

a. ok to engage in riskier behavior

b. income effect

c. choosing the most expensive treatment but is as effective as a cheaper alternative

d. choosing the most expensive treatment which is less effective than a cheaper alternative

10.Elasticity of demand curve 1 = - 0.5

Elasticity of demand curve 2 = - 2.5

Elasticity of demand curve 3 = - 0.2

Which of the following provides the greatest moral hazard potential?

Group of answer choices

a. D3

b. D1

c. D2

d. all provides identical levels of moral hazard

11.Which of the following 3 demand curves given provides the lowest social loss potential?

Group of answer choices

a. D3

b. D1

c. all 3 provide identical potential for social loss

d. D2