Which of the Following Would Be an Example of an Adverse-Selection

question 155

Multiple Choice

Which of the following would be an example of an adverse-selection problem?

• A) A person in ill health who purchases disability insurance.
• B) A person who buys a product that contributes to pollution.
• C) A person who purchases home insurance and then is less careful.
• D) A person who lobbies for government intervention to settle a property rights dispute.
• E) A person who buys extended warranty on a new automobile.

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Definitions:

Cognitive Restructuring

Cognitive restructuring is a therapeutic process aimed at identifying and changing negative or irrational thoughts and beliefs.

Maladaptive Thoughts

Negative thinking patterns that are counterproductive or harmful to an individual's mental health or well-being.

Cognitive Therapy Techniques

Strategies used in psychotherapy to change negative patterns of thinking to improve mood and behavior.

Born Loser

A derogatory term suggesting an individual who is habitually unsuccessful or unlucky, often used to imply that failure is an intrinsic part of one's character rather than due to external circumstances.