A Consequence of Adverse Selection for the Insurance Market Is

question 86

Multiple Choice

A consequence of adverse selection for the insurance market is that:

• A)risk-seeking individuals typically pay higher premiums than risk-averse individuals.
• B)everyone ends up paying higher premiums.
• C)risk-averse individuals typically pay higher premiums than risk-seeking individuals.
• D)everyone ends up paying lower premiums.

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Definitions:

Chemical Breakdown

The method of breaking down a substance into its basic elements or simpler compounds by means of chemical reactions.

Digestive System

The system of organs responsible for the breakdown and absorption of food and nutrients in the body.

Absorption

Absorption in a biological context refers to the process by which substances are taken up by the body, often through the intestinal tract.

Calcium

A chemical element essential for living organisms, primarily in cell signaling, blood clotting, and bone and teeth formation.