Which of the Following Is the Best Example of Adverse

question 4

Multiple Choice

Which of the following is the best example of adverse selection?

• A)People who face the highest risks are the people most likely to buy insurance against these risks.
• B)The residual claimant will have to bear the consequences of the most adverse outcomes.
• C)An individual can influence the probability that she has an accident.
• D)Items in the most popular styles sell out the quickest.
• E)People sometimes mistakenly choose low-quality products.

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Definitions:

Social Behavior

Involves interactions among individuals, ranging from cooperation and altruism to aggression, within a species.

Generations

Groups of people born and living around the same time, who experience and are shaped by particular societal events and cultural shifts.

Polygenic

Referring to traits that are influenced by combinations of genes.

Sociability

The tendency to seek out social interactions and preference for being in the company of others.