Ben Is an Aggressive Driver So He Is More Likely

question 7

Multiple Choice

Ben is an aggressive driver so he is more likely to buy auto insurance.This situation illustrates the idea of

• A) moral hazard.
• B) adverse selection.
• C) the lemon problem.
• D) inefficiency.
• E) a pooling equilibrium.

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Definitions:

Living Standard

The degree of prosperity, ease, physical items, and essential needs accessible to an individual, community, or social group.

Per Capita

A statistical measure that divides a total figure by the population number, providing an average per person.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all goods and services produced by an economy in real terms.

Energy Consumption

The total amount of energy used by an individual, organization, or society.