Which of the Following Describes the Concept of Adverse Selection

question 138

Multiple Choice

Which of the following describes the concept of adverse selection for consumers?

• A) It is illegal not to have car insurance if you are driving in Speedville.
• B) Your special credit card provides you with extra travel insurance.
• C) Some travellers get extra life insurance before they get on the planes.
• D) People who are more cautious tend to buy more insurance.
• E) My insurance premium has just gone up.

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Definitions:

Letters of Reference

Written recommendations from a credible source that attest to an individual's qualifications, character, and abilities.

Belief Perseverance

The tendency to maintain one's belief even after it has been discredited by new evidence.

Additional Evidence

Supplementary information or data that supports or clarifies an argument, claim, or hypothesis.

Belief Perseverance

A cognitive phenomenon where individuals stick to their initial beliefs even when faced with new, contradictory evidence.