A colleague tells you that he is purchasing a health insurance policy, but the premiums seem very high for the level of coverage.

1)Use the following table to classify each explanation for the high premiums as an instance of either adverse selection or moral hazard.

Explanation for High Premiums	Adverse Selection	Moral Hazard
The insurance company cannot determine which customers are healthy and which are unhealthy.
The insurance company believes that the health insurance will increase the likelihood that your friend will engage in dangerous, or unhealthy, behavior.

You advise your friend to have a complete physical examination by a doctor and disclose the results to the insurance company to prove he is healthy.

2)Your advice is more likely to solve the problem of either moral hazard or adverse selection?