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For each one of the cases below, select: ADV if it refers to an adverse selection problem, MOR if it refers to a moral hazard
For each one of the cases below, select: ADV if it refers to an adverse selection problem, MOR if it refers to a moral hazard problem, or NOT if it does not refer to an adverse selection or a moral hazard problem. 4) 1) Unhealthy people are more likely to want health insurance. ADV 4) 2) Risk averse individuals are more likely to want health insurance. ADV 3) Unskilled drivers purchasing extra auto insurance. MOR 6 A v 4) Risk loving drivers not purchasing auto insurance. NOT 5) The fact that managers cannot directly observe the actions of workers. MOR c 6) The fact that health insurance companies cannot observe if clients are exercising regularly. MOR 4b
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