Because of the Problem of Adverse Selection

question 58

Multiple Choice

Because of the problem of adverse selection,

• A) low-risk individuals may have a hard time finding insurance worth buying.
• B) high-risk individuals may have a hard time finding insurance worth buying.
• C) everyone is typically charged a lower premium.
• D) individuals who buy insurance act more recklessly.

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Definitions:

Negation

A compound statement whose truth value is the opposite truth value of its component statement.

Disjunction

A logical operation that results in true if at least one of its premises is true.

Conditional

A logical statement that has the form "If A then B," implying B is true if A is true.

Biconditional

A logical statement of the form "if and only if", showing that both conditions must be true or both false.