In insurance markets, adverse selection often
A. brings down prices for insurance premiums.
B. eliminates exchange possibilities that would be beneficial to both consumers and insurance companies alike.
C. creates exchange possibilities that are beneficial to consumers and insurance companies.
D. creates an abundance of lawsuits.
Answer: B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
In the above table, the opportunity cost of the 2nd pizza is
A) 0 cases of soda per pizza. B) 15 cases of soda per pizza. C) 95 cases of soda per pizza. D) 80 cases of soda per pizza.
A major cause of environmental degradation in developing countries is
(a) debt for nature swaps. (b) poverty. (c) a lack of public transportation. (d) land reform.
In a perfectly competitive market industry, firm's prices are equal to
a. Average revenue b. Marginal revenue c. Both a and b d. None of the above