When Compared to Their Peers, Which One of the Following

question 7

Multiple Choice

When compared to their peers, which one of the following methods is used to determine the premium rate?

• A) Schedule rating
• B) Experience rating
• C) Manual rating
• D) Retrospective rating
• E) Disability rating

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Definitions:

Higher Opportunity Cost

The increased potential loss of choosing one option over another, indicating a sacrifice of higher value alternatives.

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Comparative Advantage

The capacity of a nation, person, business, or area to generate a product or offer a service with a smaller opportunity cost compared to its rivals.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.