Question

The asymmetric information problem in the market for healthcare services is​ _______.

a. some people cannot afford private healthcare insurance
b. people know when they have a healthy lifestyle
c. hospitals prefer to treat patients with serious health needs because this maximizes hospital profit
d. medical workers have private information about a patient's condition, the treatments available, and the cost-effectiveness of the treatment they prescribe.
e. that the healthiest people choose to be insured

Answer 1

B

Step-by-step explanation:

Asymmetric information is an instance of market failure.

It is when one party to a transaction possesses greater information or knowledge than the other party. e.g. when a seller possesses greater information than the buyer or when a buyer possesses greater information than the seller.

Individuals know when they have a more healthy lifestyle while their insurers might not be privy to such information due to privacy laws