When People Who Buy Insurance Change Their Behavior After the Purchase

question 157

Multiple Choice

When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance, the insurance market is said to face the problem of

• A)moral hazard.
• B)adverse selection.
• C)asymmetric information.
• D)economic irrationality.

Distinguish between different B2B buying situations: new buy, straight rebuy, and modified rebuy.

Understand the concept of an evoked set in consumer decision-making.

Recognize the unique aspects and market participants in the institutional market.

Appreciate the complexity of the B2B purchasing process compared to B2C purchasing.

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Definitions:

Z Distribution

A normalization of the standard normal distribution, which is symmetric about the mean, showing the relationship between data points and their standard deviations.

Normal Curve

A bell-shaped curve that represents the distribution of values, with most occurring around a central region.

T Test

A statistical test for assessing whether the mean scores for two groups are significantly different.

Nonparametric Statistics

Statistics used with data that cannot be assumed to have a normal distribution.