With Moral Hazard,fair Insurance Contracts Are Not Viable Because

question 1

Multiple Choice

With moral hazard,fair insurance contracts are not viable because

• A)individuals' aversion to risk is reduced.
• B)insurance company's administrative costs are increased.
• C)individuals fear unscrupulous agents.
• D)probabilities of loss are increased over what is expected.

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Definitions:

Heterotrophs

Organisms that obtain energy by consuming other living things, unable to synthesize their own food.

Peptidoglycan

A complex polymer found in the cell walls of bacteria that provides structural support and protection.

Gram-positive

Refers to bacteria that retain the crystal violet dye used in Gram staining, indicating a thick peptidoglycan layer in their cell walls.

Gram-negative

Bacteria characterized by a thin layer of peptidoglycan in their cell wall, covered by an outer membrane containing lipopolysaccharides; stains pink in Gram staining.