An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above?

A) adverse selection B) moral hazard
C) economic irrationality D) asymmetric information


A

Economics

You might also like to view...

Which of the following goods would be considered legally non-excludable?

Economics

What is a Nash equilibrium? How is a Nash equilibrium different from a dominant strategy equilibrium?

What will be an ideal response?

Economics

Under a fixed exchange standard, if the domestic demand for foreign exchange increases

A) the central monetary authority must meet the demand out of its reserves. B) the central monetary authority must increase the supply of domestic money. C) the fixed exchange standard will breakdown. D) inflation will increase. E) the domestic currency must be depreciated.

Economics

Which of the following is NOT a consequence of the introduction of the Medicare program?

A) an increased quantity of medical services demanded B) an increased ability for the elderly to obtain medical services C) an increased ability for the poor to obtain medical services D) a reduced demand for medical services

Economics