In the 1970s a Los Angeles-Based Insurance Company Programmed Its

question 20

Multiple Choice

In the 1970s a Los Angeles-based insurance company programmed its computers to do all of the following except:

• A)fail to pay legitimate claims.
• B)sell fake policies to other companies.
• C)issue policies on people who did not exist.
• D)use reinsurance to disguise indebtedness.

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Definitions:

Operational Efficiency

The ability of an organization to minimize waste and maximize outputs from given inputs, often through improvements in processes and technology.

Residual Claimants

Individuals who personally receive the excess, if any, of revenues over costs. Residual claimants gain if the firm’s costs are reduced or revenues increase.

Market Wages

The prevailing pay rates for work in a particular market or industry, determined by supply and demand dynamics.

College Graduates

Individuals who have successfully completed a degree program at a college or university.