Adverse selection in insurance implies that
a. all people face the same risk
b. potential customers facing more risk are no more interested in purchasing insurance
c. people are not risk averse
d. insurers cannot tell the risk levels that different individuals face
d
You might also like to view...
If the U.S. government starts to sell off its stockpile of cheese,
A. consumers will be less willing to purchase cheese. B. the equilibrium quantity demanded will rise. C. farmers will hoard the cheese they produce. D. the quantity of cheese that spoils before sale will rise.
When the Fed purchases bonds, the Fed:
A. increases the reserves and the federal funds rate decreases. B. increases the reserves and the federal funds rate increases. C. reduces the reserves and the federal funds rate increases. D. reduces the reserves and the federal funds rate decreases.
When a baker exchanges a pie for dollars, this is an example of dollars serving as:
A. barter. B. a store of value. C. a medium of exchange. D. a unit of account.
The optimal method of production is the one that
A. maximizes output regardless of cost. B. minimizes the normal rate of return. C. maximizes inputs. D. minimizes cost.