When People or Firms That Are Worse Than Average Risks

question 50

Multiple Choice

When people or firms that are worse than average risks are most likely to enter a contract that is offered to everyone, the problem is called

• A)irrational expectations.
• B)adverse selection.
• C)opportunity cost.
• D)moral hazard.

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Definitions:

Clouding of the lens

A condition, often referred to as cataract, where the eye's lens becomes opaque or cloudy, leading to decreased vision.

Dermatitis

A broad term that describes inflammation of the skin that can result in an itchy rash or patches.

Osteoporosis

A condition characterized by weakened bones, increasing the risk of fractures, often due to reduced bone mass and deterioration of bone tissue.

Atrophy

The process of tissue breakdown or decrease in size, often due to disease, injury, or lack of use.