In an Ad for Insurance, the Text Reads "Life's an Adventure

question 121

Multiple Choice

In an ad for insurance, the text reads "Life's an adventure, and there are plenty of perils awaiting your jewelry: a lost or broken stone, theft, accidental loss, damage, mysterious disappearance Have you thought about insurance?" How does the inclusion of accidental loss and mysterious disappearance create adverse selection?

• A) Those who seek this jewelry insurance know that tend to lose their jewelry often.
• B) Individuals who own jewelry know more about their risk than insurance company.
• C) Once insured, some individuals wear their jewelry swimming, exercising, etc. where there is an increased risk of loss.
• D) Individuals who purchase insurance are risk averse.

---

Definitions:

Awareness

The knowledge or perception of a situation or fact.

Subliminal Priming

The use of stimuli below the threshold of conscious perception to influence thoughts or actions.

Stimuli

External agents or occurrences that cause a reaction or response in an organism or any of its parts.

Sensory Adaptation

The process by which sensory receptors become less responsive to constant stimuli, leading to a decrease in sensitivity.