The Problem of Adverse Selection

question 79

Multiple Choice

The problem of adverse selection

• A)implies that many people who do not need insurance coverage have it through group plans.
• B)means that those people who apply for insurance are the least likely to need insurance coverage.
• C)causes insurance underwriters to alter the health statistics of the general population when determining appropriate premiums.
• D)creates a savings element along with the insurance component of the premium and policy.

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Definitions:

Negotiating Party

A group or individual that enters into discussion with others to reach an agreement or resolve differences.

Labor Contract

An agreement between unions and employers regarding wages, working conditions, and other employment terms.

Unionization Process

The procedure through which employees in a workplace form or join a union in order to collectively negotiate with their employer regarding wages, work conditions, and other employment terms.

National Labor Relations Board

An independent US government agency charged with enforcing US labor law in relation to collective bargaining and unfair labor practices.