In Which One of the Following Situations Would Joe Be

question 148

Multiple Choice

In which one of the following situations would Joe be able to collect the entire amount of insurance claimed?

• A)Joe insured the clubhouse of a Hells Angels motorcycle club located in the next block for $75 000; the house is valued at about that amount.The clubhouse is subsequently destroyed in a fire.Joe claims $75 000.
• B)Joe owns a one-half interest in a house valued at $1000 that is completely destroyed in a fire.The house is insured for that amount and Joe makes a claim for $100 000.
• C)Joe took out a life insurance policy on his wife for $500 000,and shortly thereafter,during a fight that occurred while he was in a drunken rage,he struck his wife,causing her death.Joe claims $500 000.
• D)Joe insured his law partner's life for $500 000 and the amount he actually loses when the partner dies is only $1000.Joe claims $500 000.
• E)Joe's house suffers $20 000 damage,and he only had it insured for $1000,when the actual value was over $250 000.Joe claims $20 000.

---

Definitions:

Equilibrium Price

The market price where the quantity of goods supplied equals the quantity of goods demanded.

Quantity Demanded

The aggregate quantity of a product or service that buyers are prepared and able to buy at a specific price.

Equilibrium Price

The price point at which the demand for a product matches the supply of the product, ensuring market stability.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period.