Which of the Following Is an Example of Self Selection

question 12

Multiple Choice

Which of the following is an example of self selection?

• A) A buyer who makes a large raise in bid at an auction to discourage other bidders.
• B) A doctor who performs a large number of in-office tests and is paid per test.
• C) An elderly couple who elect a generous medical insurance policy.
• D) A CEO who takes certain self-interested actions that diminish overall shareholder value.
• E) A pitcher (about to sign with a new team) who is aware of a nagging elbow pain.

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Definitions:

Note Receivable

A written promise that a certain amount of money will be paid at a future date, representing an asset for the holder.

Interest Revenue

Income earned by an entity from lending money or through investments in interest-bearing assets.

Deferred Revenue

Deferred Revenue is income a company has received for goods or services that have yet to be delivered or performed, recorded as a liability on the balance sheet.

Service Revenue

Income earned by a company through providing services as opposed to selling physical goods.