There are 2 questions with sections representing information needed to be described on curves.

Question

Robert · Accepted Answer

Answer: 
C. 
The conventional theory is that moral hazard creates a welfare loss to the society as a 
whole. The difference in welfare that exists between point j and k measures the welfare loss 
caused by the moral hazard of insurance (m3-m2).  
D. 
The difference in welfare that exists between point j, k and n measures the welfare loss 
caused by the moral hazard of insurance. 
E. 
The difference in welfare that exists between point n and k measures the welfare gain 
caused by the moral hazard of insurance (m4-m3).  
The difference in welfare that exists between point j and k measures the welfare loss caused 
by the moral hazard of insurance (m3-m2).
Answer: 
B. 
Under perfect price discrimination, price is charged according to the consumer’s willingness to 
pay.

There are 2 questions with sections representing information needed to be described on curves.

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