Multiple Choice
Which statement is TRUE if the insurance market is efficient?
A) The deductibles eliminate moral hazard.
B) Society as a whole engages in less risky behaviour.
C) It transfers risk from those who most want to get rid of it to those least bothered by the risk.
D) Premiums are always kept to the level of a fair insurance policy.
Correct Answer:
Verified
Correct Answer:
Verified
Q7: The total utility of income curve for
Q15: Insurance companies deal with the problems of
Q24: A random variable has a certain future
Q53: Insurance premiums often fall substantially if a
Q80: You go into a grocery store to
Q81: Consider the marginal utility of income curves
Q92: If an insurance company insured 100 000
Q122: As a result of frequent flooding,the insurance
Q129: Suppose that the wealth of buyers in
Q190: In practice,insurance companies faced with adverse selection