premiums or is it just that the average benefits paid will equal the average premiums paid?

11. What is an actuarially fair insurance policy?

12. What is the problem of moral hazard?

13. How can moral hazard lead to more costly insurance premiums than one was expected?

14. Define deductibles, copayments, and coinsurance.

15. How can deductibles, copayments, and coinsurance reduce moral hazard?

16. What is the key difference between a fee-for-service healthcare system and a system based on health

maintenance organizations?

17. How might adverse selection make it difficult for an insurance market to operate?

18. What are some of the metrics economists use to measure health outcomes?

Critical Thinking Questions

19. You are on the board of directors of a private high school, which is hiring new tenth-grade science

teachers. As you think about hiring someone for a job, what are some mechanisms you might use to

overcome the problem of imperfect information?
{"creator": "PDFMiner", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_name": "Microeconomics3e.pdf", "title": "Principles of Microeconomics 3e", "file_size_mb": 26.99, "file_type": ".pdf", "producer": "Prince 14.2 (www.princexml.com)", "total_pages": 597, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "batch_upload": true, "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "upload_timestamp": "2026-02-07T15:37:44.339247", "moddate": "2022-12-07T14:23:05-06:00", "creationdate": "2022-12-07T14:15:44-06:00"}