In the Market for Automobile Insurance, Adverse Selection Implies That

question 22

Multiple Choice

In the market for automobile insurance, adverse selection implies that

• A) drivers with greater risks want to buy a policy without deductibles.
• B) drivers with greater risks want to buy a policy with large deductibles.
• C) uninsured drivers will drive recklessly.
• D) insured drivers will drive recklessly.

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Definitions:

Dissociative Disorder

encompasses a range of psychological disorders characterized by a disconnection between thoughts, identity, consciousness, and memory.

Conversion Disorder

A psychological condition in which a person exhibits neurological symptoms, such as blindness, paralysis, or fits, without a neurological explanation, often as a response to stress or trauma.

Acute Stress Disorder

A mental health condition characterized by the development of severe anxiety, dissociation, and other symptoms within a month after exposure to a traumatic event.

Generalized Anxiety Disorder

A psychological disorder characterized by persistent and excessive worry about a number of different things.