In the Market for Auto Insurance,with a Pooling Equilibrium ________

question 68

Multiple Choice

In the market for auto insurance,with a pooling equilibrium ________ and with a separating equilibrium ________.

• A) aggressive drivers pay a higher premium than do safer drivers; aggressive drivers pay a higher premium than do safer drivers
• B) no one can buy auto insurance; aggressive drivers pay a higher premium than do safer drivers
• C) aggressive and safe drivers pay the same premium; aggressive and safe drivers pay the same premium
• D) aggressive and safe drivers pay the same premium; aggressive drivers pay a higher premium than do safer drivers
• E) aggressive drivers pay a higher premium than do safer drivers; aggressive and safe drivers pay the same premium

---

Definitions:

Stereotypical Beliefs

Widely held but fixed and oversimplified ideas or perceptions of particular types of people or things.

Religious Beliefs

The faith or convictions regarding the existence, nature, and worship of a deity or deities, and divine involvement in the universe and human life.

Cultures

The shared values, traditions, norms, customs, arts, history, folklore, and institutions of a group of people.

Credibility

The quality of being trusted and believed in, often based on a reputation for honesty and integrity.