Adverse Selection Occurs When

question 14

Multiple Choice

Adverse selection occurs when

• A) a person takes more risks that are not known to the life insurance company because he has life insurance.
• B) a person buys life insurance because he has a risky lifestyle that is not known to the life insurance company.
• C) a person is a risk lover.
• D) pregnant women with health insurance make more doctor visits than uninsured pregnant women.

---

Definitions:

Evolutionary Psychology

An analytical framework applied in both social and natural sciences that investigates the psychological framework through the lens of contemporary evolutionary theory.

Change Blindness

A phenomenon where observers fail to notice substantial changes in the visual details of a scene when the change occurs during a visual disruption.

Neuroscience

The scientific study of the nervous system, including its structure, function, development, genetics, biochemistry, physiology, pharmacology, and pathology.

Cognition

All aspects of thinking, knowing, and understanding reflecting mental activities such as attention, memory, problem-solving, and language comprehension.