Adverse Selection Occurs When

question 54

Multiple Choice

Adverse selection occurs when:

• A)people with the highest risk are the most likely ones to buy insurance.
• B)insurance reduces a person's incentives to avoid or prevent certain risky events.
• C)the government refuses to provide social insurance.
• D)risk is spread across markets and time by speculators.
• E)none of the above.

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Definitions:

Primary Reinforcers

Innate reinforcing qualities, such as food and water, that satisfy biological needs and do not require learning to become effective.

Radical Behaviorists

Proponents of a branch of psychology that emphasizes the study of observable behavior and the environmental factors that influence it, often minimizing or ignoring internal states like thoughts and feelings.

Internal States

Psychological and physiological conditions that exist within an individual, such as emotions, moods, desires, and health status.

Physical Punishment

The use of physical force with the intention of causing a person to experience pain, but not injury, for the purpose of correction or control.