What Are the Two Primary Duties of Insurers to Their

question 5

Multiple Choice

What are the two primary duties of insurers to their insured?

• A) pay legitimate claims, and act to minimize losses to the insured
• B) pay legitimate claims, and make sure the insured purchases appropriate and adequate levels of insurance
• C) pay legitimate claims, and make sure that the proceeds paid for claims are properly used
• D) pay legitimate claims, and defend the insured against lawsuits brought in connection with claims covered by the policy
• E) minimize risks to the insured, and provide reasonably-priced coverage

Apply the concept of diminishing marginal utility to budget allocation decisions involving multiple goods.

Calculate the optimal consumption bundle using the marginal utility per dollar spent.

Describe the substitution and income effects on consumer choice and demand.

Distinguish between normal goods and Giffen goods based on their reaction to price changes.

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Definitions:

Fair Value

A measure of the price at which an asset or liability could be exchanged in a current transaction between willing parties.

IASB

The International Accounting Standards Board, an independent body that develops and approves International Financial Reporting Standards (IFRS).

FASB

Stands for Financial Accounting Standards Board, which is responsible for establishing and improving financial accounting and reporting standards in the United States.

Note Receivable

A written promise to receive a specific amount of money at a future date.