Adverse selection arises in the health insurance market because ________.
A) buyers have private information
B) sellers have private information
C) different firms provide different insurance schemes
D) the number of buyers and sellers is large
Question 2
Determining who receives scarce goods by the criterion of willingness to pay tends to enhance the freedom and power of people who want the goods because
A) it enables everyone to obtain at least a little of everything.
B) it facilitates choice by everyone on the basis of their own specific situation.
C) it gives everyone an equal chance.
D) it makes sure the people who obtain scarce goods are the people who most deserve them.
E) it puts genuine need ahead of politics.
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