3) Discuss whether there is empirical evidence supporting the main three predictions of the Adverse selection models (Akerlof and Rothchild-Stiglitz models). First, explain these three main predictions and then briefly discuss whether there is empirical support for each prediction. (10 points) 2 4) What are the potential mechanisms that are used to limit moral hazard problem in health insurance market. Explain each of them. (10 points)