Matty and Rudy Are the Same Age,live in the Same

question 5

Multiple Choice

Matty and Rudy are the same age,live in the same town,and hold similar jobs a similar distance from their respective homes.They are so similar,in fact,that to the insurance company,they look the same and are offered the same insurance options.However,Matty has never been a particularly good driver and so buys a lot of auto insurance.Rudy,on the other hand,takes pride in being an excellent driver and so only carries the minimum insurance required.This example illustrates the potential for :

• A) risk pooling.
• B) risk aversion.
• C) adverse selection.
• D) diversification.

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Definitions:

Homeostasis

The process by which organisms maintain a stable internal environment despite changes in the external environment.

Blood Glucose

The concentration of sugar in the bloodstream, which is critical for maintaining bodily functions and energy levels.

Appetizing Food

Food that is visually appealing and stimulates the desire to eat due to its appearance, smell, or anticipated taste.

Steady Internal State

The maintenance of a consistent internal environment within an organism, often referred to as homeostasis.