Which of the Following Statements About the Factors Affecting Automobile

question 26

Multiple Choice

Which of the following statements about the factors affecting automobile insurance rates is true?

• A)The cost of collision coverage increases as a car gets older.
• B)Because of high speeds in rural areas,rural drivers tend to pay more for auto insurance than city drivers pay for auto insurance.
• C)Young unmarried male drivers tend to have fewer accidents than young married male drivers in the same age category.
• D)People who drive a car to and from work tend to be charged higher rates than those who use a car for pleasure purposes.

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Definitions:

External Sales

Sales made to parties outside of the company, as opposed to internal transactions.

Variable Cost

Costs that vary directly with the level of production or volume of output.

Excess Capacity

The situation where a company's production facilities can produce more goods than currently demanded by its market.

General Transfer-Prizing Rule

A principle used to determine the price at which goods and services should be transferred between departments within the same organization.