T3W10 Lecture Wed

What is the purpose of public education campaigns in the context of medical screening?

• To increase the private costs of consuming medical screening services

• To reduce the awareness of the full benefits of medical screening

• To bridge the gap between perceived private benefits and actual benefits

• To provide more information to the doctors when supplier-induced demand is present

How does saliency bias arise in the context of public education campaigns?

• The tendency to focus on less prominent but equally relevant information

• The tendency to focus on information that is more prominent over other relevant information

• The ability to solve the root cause of a problem

• The bias arising from the problem of asymmetric information

Which factor(s) can affect the effectiveness of subsidies in increasing output to the socially optimal level?

• Government's imperfect information

• Responsiveness of consumers to price changes

• • Degree of financial constraints

• Non-rejectability

When the govt. implements indirect subsidies for goods with positive externalities (in production or consumption), what are the changes seen on the diagram?

• MPB shifts

• MPC shifts

• MSC shifts

• MSB shifts

• MEB shifts

1. What is the potential benefit of legislating compulsory medical screening for all individuals before the purchase of healthcare insurance?

• Encouragement of low-risk individuals to purchase insurance at a lower premium

• Discourages risk-taking behaviour by insured individuals

• Addresses the overallocation of resources to the market

• It forces low-income individuals to purchase healthcare insurance

What is the aim of legislating compulsory enrollment for health insurance as a policy measure to tackle adverse selection in the health insurance market?

• To address risk-taking behavior by insured individuals

• To discourage low-risk individuals from purchasing healthcare insurance

• To provide a mix of both high-risk and low-risk individuals in the healthcare insurance pool

• To reduce the overconsumption of health insurance by low-risk individuals

What is the aim of legislating features of co-payments such as deductibles and co-insurance as a policy measure to tackle moral hazard in the insurance market?

• To simplify the insurance claims process

• To ensure that insurance companies earn at least supernormal profits

• To deter insured parties from taking risky behavior and claiming excessively

• To promote competition among insurance providers

What is a potential consequence of moral hazard in the insurance market?

• Increased profitability for insurance companies

• Encouragement of risk-averse behavior by insured parties

• Over-consumption of scarce resources due to excessive claims

• Greater transparency in insurance policies