Which of the Following Could Be Written into an Insurance

question 215

Multiple Choice

Which of the following could be written into an insurance contract in order to reduce the problem of moral hazard?

• A)co-payments for repair services 
• B)deductibles for repair services 
• C)limitations on insurance coverage 
• D)All of the above are correct.

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Definitions:

Direct Labour

refers to the workforce directly involved in the manufacture of goods or provision of services.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain relatively constant regardless of the level of production, such as rent, salaries, and insurance.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Net Operating Income

The income generated from normal business operations after subtracting operating expenses from gross profit.