An Insurance Lacks the Information Needed to Distinguish Between Safe

question 8

Multiple Choice

An insurance lacks the information needed to distinguish between safe and risky people and therefore charges everyone the same average premium. As a result, the ________ people will not buy insurance, and the industry will be selling only to ________ people.

• A) risk-neutral, safe
• B) safe, risky
• C) risky, safe

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Definitions:

Literacy Monopoly

The concentration of the ability to read and write within a specific group, limiting access to knowledge and power to others.

STEM Fields

Disciplines encompassing Science, Technology, Engineering, and Mathematics, emphasizing innovation, critical thinking, and problem-solving.

Social Sciences

Academic disciplines that study human society and social relationships through various methods of empirical investigation and critical analysis.

Business

Organized efforts by individuals or entities to produce and sell goods and services for profit.