The General Rule That Ambiguity in Insurance Contracts Is Construed

question 37

Multiple Choice

The general rule that ambiguity in insurance contracts is construed against the insurer is reinforced by an important legal principle.This principle states the insured is entitled to coverage under a policy that he or she would assume the policy would provide,and exclusions must be conspicuous,plain,and clear.This principle is known as

• A)the principle of utmost good faith.
• B)the principle of reasonable expectations.
• C)the principle of subrogation.
• D)the principle of indemnity.

Differentiate between short-run and long-run cost structures and their implications for firm decision-making.

Recognize the relevance and implications of sunk costs and the sunk cost fallacy in economic decision-making.

Interpret diagrams related to cost curves, including total costs, average costs, and marginal costs.

Understand economies and diseconomies of scale and their impact on firm costs over different ranges of output.

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Definitions:

King of Diamonds

A card in a standard deck of playing cards, representing the king from the suit of diamonds.

Well-Shuffled Deck

A state of a deck of cards in which the order of the cards is randomized to such an extent that no discernible patterns exist, ensuring fair play.

Fair Coin

A fair coin implies a perfectly balanced coin where the probabilities of landing on heads or tails are exactly equal, each being 50%.

Sample Space

The set of all possible outcomes of a random process.