If a State Requires All Drivers to Purchase Auto Insurance

question 156

Multiple Choice

If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of

• A)correctly pricing their insurance.
• B)sunk costs.
• C)adverse selection.
• D)excess demand for their insurance.

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Definitions:

Out-Group

A group of people excluded from or not belonging to one's own group, often leading to us vs. them mentality.

In-Group

A social group to which a person psychologically identifies as being a member.

Pariah

An individual who is despised or rejected by others, often used to describe an outcast in society.

Discrimination

involves treating someone differently or unjustly based on certain characteristics, such as race, age, gender, or sexuality, rather than individual merit.