A Person Who Practices Poisonous Snake Charming and Does Not

question 116

Multiple Choice

A person who practices poisonous snake charming and does not reveal this to her health insurance company before purchasing insurance is an example of

• A) moral hazard.
• B) adverse selection.
• C) signaling.
• D) screening.

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Definitions:

Implied Warranty

A legal term referring to a warranty that is not expressly stated but is assumed by law to exist in a sale.

Release

A legal agreement where one party forfeits the right to pursue a claim or lawsuit against another party.

Damages

A monetary compensation awarded by a court to a person who has suffered a loss or injury.

Incidental Beneficiary

A person or entity that indirectly gains a benefit from a contract to which they are not a party, without the contract specifically intending such benefit.