Zelig Owns a Widget Worth $25 000

question 42

Multiple Choice

Zelig owns a widget worth $25 000.He purchased property insurance from Superior Insurance Co.The widget was irreparably damaged as a result of an accident that was caused by Zoe.Zoe has a liability insurance policy from Erie Insurance Co.Which of the following statements is TRUE?

• A)Zelig cannot claim a benefit from Superior Insurance Co unless Zoe caused the accident in a way that exposed her to liability in tort.
• B)If it is required to pay a benefit of $25 000 to Zelig,Superior Insurance Co can claim the same amount of money from Erie Insurance Co even if Zoe could not be held liable to Zelig for damaging the widget.
• C)If Superior Insurance Co sues Zoe,it will do so on the basis of the concept of contribution.
• D)The concept of subrogation means that if Zelig successfully sues Zoe in tort,she will be able to claim a benefit from Superior Insurance Co.
• E)If Superior Insurance Co pays a benefit to Zelig,it will be entitled to exercise subrogated rights against Zoe.

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Definitions:

Price Elasticity

Understanding the correlation between the price of a good and the demand it receives.

Strawberries

A soft, red fruit with a sweet flavor and a fragrant aroma, often consumed fresh or used in culinary preparations.

Price Elasticity

An indicator of the extent to which the demand for a product varies following a price adjustment.

Total Revenue

The total amount of money generated from the sale of goods or services before any costs are subtracted.