Which of the following is an example of adverse selection? Group of answer choices A safe driver taking greater risk in a rental car than his own car. A risk averse driver buying car insurance. An company

The adverse selection problem is least likely in which of the following occupations? explain               Lawyer Barber College professor Marketing Analyst Manager

Whcih of the following could help overcome the problem of adverse selection in the used car market?   Multiple Choice   The buyer could have a mechanic inspect the car before buying it.   The government could enact disclosure laws requiring that potential buyers be told all material facts about the condition of a vehicle for sale.   The seller could include a warranty.   all of the above

Which one is an option for health insurance market     Universal public insurance     Compulsory insurance     Employer-sponsored insurance     All of the above

QUESTION 48 A recent study demonstrated that when states pass laws mandating that health insurance cover treatment for alcoholism, alcoholism rates in the state as well as alcohol related medical issues and drunk driving increase significantly. This is an example of: A. Adverse selection B. Risk spreading C. Moral hazard D. Opportunism

Alana wishes to obtain auto insurance. She wants 100/300/100 liability coverage, $250 deductible collision and full coverage comprehensive. She lives in territory 2 and has been assigned to driver class 2 with a rating factor of 1.25. Based on Table 19-6 and Table 19-7, what would be her total premium, if her three-year-old car were in model class L? (Round your answer to the nearest cent.) a. $355.00 b. $365.00    c. $456.25 d. $465.38

Suppose that every driver faces a 2% probability of an automobile accident every year. An accident will, on average, cost each driver $14,000. Suppose there are two types of individuals: those with $112,000.00 in the bank and those with $3,500.00 in the bank. Assume that individuals with $3,500.00 in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is .   Assume that the price of insurance is set at the actuarially fair price. At this price, drivers with $112,000.00 in the bank likely    buy insurance, and those with $3,500.00 in the bank likely    buy insurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.)   Suppose a state law has been passed…

Progressive packages home and auto insurance services together for one price using bundle pricing, a common _____Blank practice.

Chris left a skillet of hot oil on the stove, which torched the kitchen cabinets. In insurance, the fire is an example of peril Risk liability abandonment

High deductible plans in the U.S. reduce adverse selection.  True  False