Safe Times Insurance requires a medical examination for all applicants for medical insurance. Those with significant preexisting conditions are charged more. This is an example of:

Alright, let's try this one. Safe times insurance requires a medical examination for all applicants for medical insurance. Those with significant pre existing conditions are charged more. Alright, so this is an example of moral hazard, adverse selection, signaling, or screening. Well remember that adverse selection, that's the idea where there's private information that's gonna be used before the transaction, so there's one party that knows more than the other. In this case, who knows more? The person buying insurance, right? The insured knows more about their health. So what is the company doing? Well they're trying to find out information from the insured and when they pull the information out, when the uninformed party is taking the action, well that's when we have screening, right? That's when the uninformed party is taking the action to reveal information. Signaling is the opposite where the informed party is willingly trying to give up their private information. Okay? So here we have an example of screening, right? Where the insurance company is trying to reveal some of the information through this medical exam. Alright, let's move on to the next video.

Safe Times Insurance requires a medical examination for all appli...

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1. Reading and Understanding Graphs59m

2. Introductory Economic Models1h 10m

3. The Market Forces of Supply and Demand2h 26m

4. Elasticity2h 16m

5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m

6. Introduction to Taxes and Subsidies1h 46m

7. Externalities1h 12m

8. The Types of Goods1h 13m

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10. The Costs of Production2h 35m

11. Perfect Competition2h 23m

12. Monopoly2h 13m

13. Monopolistic Competition1h 9m

14. Oligopoly1h 26m

15. Markets for the Factors of Production1h 33m

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Safe Times Insurance requires a medical examination for all applicants for medical insurance. Those with significant preexisting conditions are charged more. This is an example of:

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