Which of the Following Is Not Related to Adverse Selection

question 88

Multiple Choice

Which of the following is not related to adverse selection in insurance markets?

• A)An insurance company has no way of distinguishing among applicants
• B)An insurance company must charge a higher price to applicants who are good health risks
• C)The price of insurance is attractive to poor health risks, but not to good ones
• D)The insured group becomes less healthy on average
• E)Because of the relative unhealthiness of the insured group, rates must rise

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Definitions:

Routes

Paths or directions followed for the transportation of goods or services from one location to another.

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at promoting fair competition and preventing monopolies by prohibiting certain types of anti-competitive practices.

Sherman Act

A landmark federal statute in the field of United States antitrust law aimed at preserving competitive markets by prohibiting monopolies and other business practices that hinder competition.

Standard Oil Trust

A historically significant corporation that monopolized the oil industry in the United States through the aggressive consolidation of competing enterprises.