BBB Auto Club provides emergency road service and other services to its members. BBB Auto Club charges a higher membership fee to new members than it charges to members who are renewing their membership
When asked to explain this pricing policy, the auto club president noted, "New members often sign-up prior to taking a long road trip, so we have to charge more as first-year members have higher service utilization rates." A similar phenomenon observed in insurance markets is called
A) attitudinal hazard.
B) adverse selection.
C) risk aversion.
D) moral hazard.
Answer: B
You might also like to view...
Ethical communication requires that we be held accountable for the welfare of others and for the consequences of our own actions. This is known as ______.
a. responsibility b. self-respect c. autonomy d. ethical connection
Property of a person who dies without a will is distributed according to intestacy laws
a. True b. False Indicate whether the statement is true or false
During the closure process, how does the project manager meet the challenge to keep the project team focused on the remaining project activities and delivery to the customer until the project is complete?
Fill in the blank(s) with the appropriate word(s).
When a company dissolves, preferred stockholders typically have the right to receive their share of corporate assets before common shareholders
Indicate whether the statement is true or false