One way of reducing the moral hazard problem in the automobile insurance market is for drivers to
A) carry high deductibles.
B) carry no deductibles.
C) all have good driving records.
D) never make any claims.
Question 2
Which of the following differs between a perfectly competitive market and a market with a perfectly price discriminating monopoly?
A) The amount of producer surplus
B) The quantity produced
C) The total surplus
D) None of the above because they are all the same in a perfectly competitive market and in a market with a perfectly price discriminating monopoly.