As It Applies to Insurance, the Adverse Selection Problem Is

question 193

Multiple Choice

As it applies to insurance, the adverse selection problem is the tendency for

• A) those most likely to collect on insurance to buy it.
• B) those who buy insurance to take less precaution in avoiding the insured risk.
• C) sellers to price discriminate.
• D) sellers to restrict output and charge high prices.

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Definitions:

Actual Productivity

The real output or results produced by an individual, group, or organization, as opposed to potential output or expected performance.

Faulty Process

An ineffective or flawed procedure that leads to undesired outcomes.

Disjunctive Tasks

Tasks for which the performance of the group is determined by the best individual performance within the group.

Social Loafing

describes the phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.