In the Market for Auto Insurance,in a Pooling Equilibrium

question 1

Multiple Choice

In the market for auto insurance,in a pooling equilibrium,

• A) risky and safe drivers pay the same premium for insurance.
• B) risky drivers pay a larger premium than do safe drivers for insurance.
• C) risky drivers pay a smaller premium than do safe drivers for insurance.
• D) risky drivers cannot obtain insurance.
• E) safe drivers cannot obtain insurance.

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Definitions:

Object Permanence

The understanding that objects don't vanish from existence just because they're momentarily undetectable to our senses.

Erik Erikson

A developmental psychologist and psychoanalyst known for his theory on the psychosocial development of human beings, identifying eight stages that extend from birth to death.

Resilience

The ability of an individual to quickly recover from difficulties; a form of mental toughness or elasticity.

Holocaust

The systematic mass slaughter of six million Jews and millions of others by the Nazis during World War II.