A Homeowner Discovers That a Large Tree in His Yard

question 48

Multiple Choice

A homeowner discovers that a large tree in his yard is diseased and may fall in a bad windstorm and if it falls, it will likely destroy the garage.The cost to have the tree cut down is significant but the homeowner has an insurance policy and figures that if the tree falls and destroys the garage, the insurance company will pay, and the deductible is less than the cost to have the tree removed.This is an example of:

• A)Information symmetry
• B)Adverse selection
• C)Moral hazard
• D)Screening

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Definitions:

Schizotypal Personality Disorder

A mental health disorder characterized by severe social anxiety, thought disorder, paranoid ideation, derealization, transient psychosis, and often unconventional beliefs.

Socially Anxious

Experiencing anxiety or fear in social situations, often due to worries about being judged or embarrassed.

Peculiar Ideas

Thoughts or beliefs that are unusual or atypical, sometimes reflecting creativity or innovation, but in other contexts may suggest delusional thinking or disorders.

Obsessive-compulsive

Pertaining to a disorder characterized by intrusive thoughts (obsessions) and repetitive behaviors (compulsions) as a response to these thoughts.