1. What is the effect of the moral hazard problem on insurance premiums? Explain your answer.
2. Economics professors Thomas Hopkins and Arthur Gosnell of the Rochester Institute of Technology estimated that in the year 2000, regulations cost the United States $662 billion, or about $5,700 per family.
a. Do their findings mean that the United States had too many regulations?
b. How would an economist decide which regulations to keep and which to do away with?
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