The Internet Has Resulted in Lower Search Costs, Increased Price

question 64

Multiple Choice

The Internet has resulted in lower search costs, increased price comparison, and lower prices to consumers for which insurance product line?

• A) term life insurance
• B) automobile insurance
• C) health insurance
• D) property and casualty insurance

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Definitions:

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, highlighting combinations that provide the same level of utility to the consumer.

Total Utility

The total gratification or enjoyment a customer receives from using a specific amount of products or services.

Marginal Rate

The increase or decrease in a unit of an outcome resulting from a one unit change in another variable.

Substitution

The economic principle whereby consumers replace more expensive items with less costly alternatives, or firms use different inputs in their production process.