Adverse Selection Is Said to Exist When an Individual

question 51

Multiple Choice

Adverse selection is said to exist when an individual

• A) selects a product which has adverse externalities.
• B) has the incentive to, and is able to, shift costs to another individual.
• C) is averse to certain products.
• D) is not able to take advantage of another individual.
• E) purchases a lot of insurance because he/she knows that he/she is at high risk.

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