Problem
I. What is adverse selection? Why does it happen? How does it happen? Why is adverse selection economically inefficient?
II. In an agency relationship who is the principal? Who is the agent?
III. How does increased information affect providers' monopoly power and the prices paid by clients/patients?
IV. How does the gain from insurance change as the probability of illness changes?
V. What is job lock?
VI. Labor market outcomes of different scenarios: (i) the cost of insurance is higher than the value of insurance to the employees. (ii) the cost of insurance is lower than the value of insurance to the employees.
VII. Calculating net pay (take-home less insurance) when employee buys his/her own insurance versus when the insurance is provided via the employer.