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2 years ago

Tendency for an insured person to overuse health services because he has insurance?

Business

1 answer:

balandron [24]2 years ago

6 0

Moral hazard is the tendency for an insured person to overuse health services because he has insurance.

<h3>What is Moral hazard?</h3>

If an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk is known as a moral hazard
For example, when an organization is insured, it's going to take on higher risk knowing that its insurance will pay the associated costs
When the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place, a moral hazard may occur.
Moral hazard can be considered as a type of information asymmetry, where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information.

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Suppose that a store sells candy bars for $0.89 for one and $1.50 for two. The marginal cost of the second candy bar is:

hoa [83]

The marginal cost of the second candy bar is:$0.61.

<h3>Marginal cost</h3>

Using this formula

Marginal cost=Selling price for two-Selling price for one

Where:

Selling price for one=$0.89

Selling price for two=$1.50

Let plug in the formula

Marginal cost=$1.50-$0.89

Marginal cost=$0.61

Inconclusion the marginal cost of the second candy bar is:$0.61.

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4 0

2 years ago

ole Company’s stock currently sells for $20 per share. It just paid dividends of $1.00 per share. The dividend is expected to gr

Montano1993 [528]

Answer:

The required rate of return is 11%

Explanation:

Dividend valuation method calculated the value of stock based on dividend payment, growth rate and required rate of return.

Use following formula to calculate the the required rate of return

Price = Dividend / ( Required Rate of return - Growth rate )

20 = $1 / ( Required Rate of return - 6% )

20 = $1 / ( Required Rate of return - 0.06 )

Required Rate of return - 0.06 = $1 / $20

Required Rate of return - 0.06 = 0.05

Required Rate of return = 0.05 + 0.06

Required Rate of return = 0.11

Required Rate of return = 11%

3 0

4 years ago

Adam Smith believed that fair prices for goods are determined in a capitalist system:______ a) through competition between busin

Alexus [3.1K]

Answer:

The correct answer is A

Explanation:

Adam Smith is one of the first theorist who refer to the system of capitalism. Under this system, he asserts that when the person or an individual conduct or make a trade, they value what they bought more than they value what are exchanging for the commodity.

So, under this system, he believed that the fair as well as correct prices of the commodity or the goods will be determined through the competition among the businesses.

5 0

3 years ago

If the demand for product x is inelastic, a 4 percent decrease in the price of x will.

NeTakaya

A 4 percent decrease in the price will lead to an increase in the quantity demanded by less than 4 percent.

<h3>What is demand?</h3>

Demand simply means the amount of goods and services that a buyer wants to buy at a particular price and time.

When the demand for product x is inelastic, a 4 percent decrease in the price of x will lead to an increase in the quantity demanded by less than 4 percent.

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3 0

2 years ago

A company with significant assets and activities in multiple countries is known as a(n):____.

Gnom [1K]

A company with significant capital and activities in multiple countries is known as a multinational corporation.

A multinational corporation generally has offices or factories in different and multiple countries and a centralized head office where they coordinate global management.

Other than its home country, a multinational corporation has facilities and other capital in at least one country. Many multinational enterprises are based in developed nations.

The multinational advocates create high-paying jobs and technologically advanced goods in countries that otherwise would not have reach to such opportunities or goods.

Some examples of multinational corporations include- Apple, Samsung, Starbucks, Ikea, Nike, McDonalds, Pepsi etc.

Hence, option A is correct.

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8 0

2 years ago