If Reckless Drivers Are More Likely to Buy Automobile Insurance

question 19

Multiple Choice

If reckless drivers are more likely to buy automobile insurance than safe drivers are,

• A) a moral hazard has occurred.
• B) adverse selection has occurred.
• C) the market for insurance is efficient.
• D) then automobile insurance will be fairly priced.

---

Definitions:

Temporal Lobes

Regions of the brain located on either side of the head above the ears, involved in processing auditory information, memory storage, and language.

Cerebellum

The part of the brain at the back of the skull in vertebrates, responsible for coordinating and regulating muscular activity.

Flashbulb Memory

The memory of emotionally significant events that people often recall with more accuracy and vivid imagery than everyday events.

Implicit Memory

Memory that influences thoughts and behaviors without conscious awareness, including skills and procedures learned through experience.