The Cost of Group Health Insurance Is Lower Than If

question 151

Multiple Choice

The cost of group health insurance is lower than if an individual buys a policy on his own because

• A)the problem of adverse selection is reduced.
• B)moral hazard costs of a group tend to move to a low average.
• C)it is easier for the company to deny claims from a large group.
• D)insuring a group eliminates the problem of buyers having more information than the seller.

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Definitions:

Return on Investments

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Competitors

Other businesses or products that offer similar solutions or target the same customers within a market.

Industry Averages

Statistical measures that represent the typical performance or behavior of companies within a particular industry, often used for benchmarking purposes.

Promotion-to-Sales Ratio

A metric used to measure the effectiveness of a promotional campaign by comparing the cost of the promotion to the generated sales.