Multiple Choice
In the market for auto insurance,with a pooling equilibrium ________ and with a separating equilibrium ________.
A) aggressive drivers pay a higher premium than do safer drivers; aggressive drivers pay a higher premium than do safer drivers
B) no one can buy auto insurance; aggressive drivers pay a higher premium than do safer drivers
C) aggressive and safe drivers pay the same premium; aggressive and safe drivers pay the same premium
D) aggressive and safe drivers pay the same premium; aggressive drivers pay a higher premium than do safer drivers
E) aggressive drivers pay a higher premium than do safer drivers; aggressive and safe drivers pay the same premium
Correct Answer:
Verified
Correct Answer:
Verified
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