What is adverse selection? Why does it happen? How does it happen? Why is adverse selection economically inefficient? In an agency relationship who is the principal? Who is the agent? . How does increased information affect providers' monopoly power and the prices paid by clients/patients? Chapter 11 How does the gain from insurance change as the probability of illness changes? What is job lock? . Labor market outcomes of different scenarios: 1) the cost of insurance is higher than the value of insurance to the employees. 2) the cost of insurance is lower than the value of insurance to the employees. . Calculating net pay (take-home less insurance) when employee buys his/her own insurance versus when the insurance is provided via the employer