Which of the Following Is Not a Defense Against Paying

question 32

Multiple Choice

Which of the following is not a defense against paying a claim that an insurer could raise?

• A) The policy was obtained by fraud.
• B) The insured lacked an insurable interest.
• C) The insured acted in good faith.
• D) The actions underlying the claim were illegal.

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Definitions:

Profitable

Generating revenue that exceeds the costs and expenses involved in operating.

Long-Run Equilibrium

Long-run equilibrium occurs in a market when supply equals demand over time, allowing all participants to adjust fully to any changes.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced.

Price Takers

Price takers are participants in a market who must accept prevailing prices and cannot influence them due to their small market share.