Moral hazard create costs for insurance companies because
A) insurance companies are unable to diversify across insurance markets when there is a moral hazard problem.
B) individuals are more likely to engage in risky behaviour once they have the comfort offered by an insurance policy.
C) adverse selection has become a bigger problem in recent years.
D) all of the above
Correct Answer:
Verified
Q18: Individuals take out insurance because they are
A)
Q19: In which of the following cases is
Q20: The law of large numbers is defined
Q21: Which of the following is an example
Q22: Which of the following describes moral hazard?
A)
Q24: Insurance companies can reduce the moral hazard
Q25: An indifference curve is
A) the
Q26: Assume Diana buys sweatshirts and T- shirts.
Q27: An indifference curve is convex to the
Q28: As long as indifference curves are convex
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