Which of the Following Statements About the Additional Coverages Under

question 43

Multiple Choice

Which of the following statements about the additional coverages under Section I of the Homeowners 3 policy is true?

• A)There is coverage for the reasonable cost incurred to protect property from further damage after a covered loss occurs.
• B)There is unlimited coverage for furnishings of the landlord in an apartment on the premises that is rented to others.
• C)Property removed from the premises because it is endangered by an insured peril is covered on a named-perils basis while it is outside the insured premises.
• D)Damage caused by the settling of the insured structure is covered as a collapse.

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Definitions:

Economic Profits

Profits calculated by subtracting total explicit and implicit costs from total revenues; measures the excess over both the opportunity cost of capital and the wages that business owners could have earned elsewhere.

Marginal Cost

The escalation in total expenses incurred from the production of an additional unit of a product or service.

Marginal Costs

The change in total cost that comes from making or producing one additional item.

MC Curve

A graph representing the marginal cost of producing each additional unit of output in a firm or economy.