Which of the Following Is an Example of Adverse Selection

question 159

Multiple Choice

Which of the following is an example of adverse selection?

• A)The odds of a fire rise after a building is insured because the person with fire insurance is likely to pay less attention to fire hazards.
• B)Someone who did not install fire alarms and a sprinkler system in a building he owns buys insurance for the building.
• C)Someone with automobile insurance drives more recklessly than someone without insurance.
• D)People prefer to buy new cars rather than used cars.

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Definitions:

Cow's milk

A common dairy product obtained from the milk of cows, used as a beverage or food ingredient.

Solid foods

Foods that are not liquid or pureed, introduced to an infant’s diet typically around six months of age to complement breastmilk or formula.

Whole cow's milk

The complete, unaltered milk obtained from cows, rich in nutrients like fat, protein, vitamins, and minerals, generally consumed after infancy.

Months old

A measure of age, particularly used for infants and young children, indicating the number of months since birth.