Question

question 24 (0.5 points)
when the action of one creates an effect on the well - being of another, it is called ____.
○ rage
○ externality
○ change
question 25 (0.5 points)
name a hypothetical policy that pays out all monies that it takes in.
○ fee for service
○ actuarially fair insurance
○ capitation
○ annuity

Explanation:

Question 24

• "Rage" is intense anger, not related to the described concept.
• "Externality" in economics (and related fields) refers to the impact of one's action on others' well - being (positive or negative) without being reflected in market prices.
• "Change" is a general term for alteration and does not fit the specific definition. So the correct term is externality.

• "Fee for service" is a payment model for services, not about paying out all revenues.
• "Actuarially fair insurance" is an insurance policy where the premium (the money taken in) is equal to the expected payout (so it pays out all the money it takes in, in an expected value sense).
• "Capitation" is a fixed payment per patient, not about paying out all revenues.
• "Annuity" is a financial product for regular payments, not about paying out all revenues. So the correct option is Actuarially fair insurance.

Answer:

B. externality

Question 25