BBB Auto Club Provides Emergency Road Service and Other Services

question 45

Multiple Choice

BBB Auto Club provides emergency road service and other services to its members.BBB Auto Club charges a higher membership fee to new members than it charges to members who are renewing their membership.When asked to explain this pricing policy,the auto club president noted,"New members often sign-up prior to taking a long road trip,so we have to charge more as first-year members have higher service utilization rates." A similar phenomenon observed in insurance markets is called

• A)attitudinal hazard.
• B)adverse selection.
• C)risk aversion.
• D)moral hazard.

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Definitions:

Reason Better

The process of improving one's ability to think logically, make sound judgments, and solve problems effectively.

Perspective Of Others

The ability to understand and consider the viewpoints, feelings, or situations of other people.

Liberal Feminists

Advocates who focus on achieving gender equality through political and legal reform within the framework of liberal democracy.

Gender Differences

The distinctions in characteristics and behaviors typically associated with being male or female, influenced by biological, social, and cultural factors.