Which of the following is NOT an example of on-demand insurance? Which of the following is NOT an example of on-demand insurance? You insure your drones whenever they are taken out of your home environment You purchase an instant travel insurance for the duration of an upcoming trip Your insurance premium fluctuates depending on your driving behavior Your insurance coverage is activated whenever you take on a passenger in your ca

Which of the following is NOT an example of on-demand insurance? Which of the following is NOT an example of on-demand insurance? You insure your drones whenever they are taken out of your home environment You purchase an instant travel insurance for the duration of an upcoming trip Your insurance premium fluctuates depending on your driving behavior Your insurance coverage is activated whenever you take on a passenger in your ca

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 15QP

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For each of the following kinds of insurance, give anexample of behavior that reflects moral hazard andanother example of behavior that reflects adverseselection.a. health insuranceb. car insurancec. life insurance
Because of the moral hazard problem, a-the government has increased incentive to regulate insurance markets. b-low-risk individuals do not choose insurance. c-the costs of providing insurance decreases. d-full insurance may no longer be efficient.
Which of he following sections of an insurance contract limits coverage? A.Waiver of Premium B.Conditions C.Exclusions D.Declarations
The difference between the actuarily fair price for insurance and the price a risk-averse individual is willing to pay to fully insure is called a-insurance benefit b-risk aversion c-the risk premium d-risk profit
The key concept that explains why individuals choose to obtain insurance and why they may be less likely to gamble with their wealth is: a. increasing marginal utility in wealth b. constant marginal utility in wealth c. decreasing marginal utility in wealth
Name two solutions to adverse selection in insurance and explain how they work.
Which of he following characleristics is typical of group insurance? A.Medical examinations are required. B.Each employee receives an individual contract C.All full-lime employees are eligible for coverage. D.Employees may automalically enroll for coverage at any time.
Please answer I am so confused, thank you! Health insurance policies attempt to minimize moral hazard by: a. calculating expected utilities b. including cost-sharing mechanisms (deductibles, copayments, etc.) c. charging premiums d. selling insurance to risk seekers
Which one is not true about the private insurance market Only the frail customers are insured fully and much of the population is underinsured Under certain conditions can lead to uninsurance for everyone Maximizes government involvement Maximizes adverse selection
List two possible solutions private insurance firms have at their disposal to correct the market failure due to the asymmetry of information...
Describe the challenges that adverseselection and moral hazard pose for insurance.
Distinguish between adverse selection and moral hazard as they relate to the insurance industry.