Which of the Following Statements Is (Are)true with Regard to Using

question 32

Multiple Choice

Which of the following statements is (are) true with regard to using interest-adjusted cost data when shopping for life insurance?
I.Cost indexes apply to new policies and should not be used to determine whether to replace a policy.
II.Cost indexes should only be used to compare similar plans of insurance.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

---

Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to the optimal distribution of resources.

Constant Returns

A condition in production where increasing the amount of inputs results in a proportional increase in outputs.

U-shaped

A graphical representation describing a situation or relationship that initially decreases, reaches a minimum point, and then increases.

Long-run Average Cost

The cost per unit of output when all factors of production, including capital, are variable and optimized for scale.