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.

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Definitions:

Stereoscopic Vision

The ability to perceive depth and three-dimensional structure from visual information, due to the brain processing images from both eyes.

Color Vision

The ability of organisms to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Binocular Vision

The ability to maintain visual focus on an object with both eyes, creating a single visual image.

Two-Dimensional Vision

The perception of visual information in only two dimensions (width and height), lacking depth, which is the third dimension; common in depictions like drawings or photographs.