Automobile Insurance Companies Have a Problem with People Who Buy

question 52

Multiple Choice

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words, the automobile insurance market is subject to

• A)asymmetric information.
• B)market signaling.
• C)moral hazard.
• D)adverse selection.

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Definitions:

Weekend Getaway

A short leisure trip taken over a weekend, providing a brief break from daily routines.

Price Elasticity Of Demand

A measure of the responsiveness of the quantity demanded of a good to a change in its price.

Cleveland Visitors Bureau

An organization tasked with promoting tourism and attracting visitors to the Cleveland area.

Weekend Getaway

A short trip taken for leisure, typically over a weekend period, to relax and escape from routine.