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

---

Definitions:

Credibility

The quality of being trusted and believed in, or the degree to which a source or piece of information is considered accurate and reliable.

Clothing Style

The manner in which an individual combines pieces of clothing to express their personal style or adhere to cultural norms.

Non-Random Assignment

A method in research where participants are allocated to different groups using criteria other than chance, often leading to selection bias.

New Exam Review Procedure

An updated or novel method for reviewing materials, questions, or strategies to prepare for examinations.