Exam 16: Information, Risk, and Insurance

_____________________ cannot be eliminated, but it can often be managed.

A ________________________ is a form of incentive to purchase a product on a 30 day trial basis.

If insurance premiums are going to be set below the actuarially fair level for a certain group, who will likely be targeted to make up the difference?

What do service contracts, occupational licenses and cosigners all share in common?

In the case of insurance, _______________ arises because the buyers of insurance have more information about _____________________than the insurance company does.

__________ is something valuable that a lender would have a right to________________ if the loan is not repaid.

The chef at a high-end French cuisine restaurant has accepted a job on a cruise liner. The restaurant owner must advertise for a replacement chef, but is concerned about reducing the amount of imperfect information respondents to the career ad will provide. This concern can best be addressed by

In the labor market, a stipulation that the first three months of employment is a trial period is

Changes in weather patterns are increasing administrative costs for insurance companies. These added costs often exceed the amount of the premiums coming in and claim payments going out. To address this problem, insurance companies typically

If a website facilitates the sale of goods by individuals and businesses over the internet, but requires actual photos of every item for sale to be posted instead of a manufacturer's stock picture of the product, demand for that product will likely ___________ due to the improved information, causing quantity to ___________ .

With regard to the provision of health insurance in the United States, which of the following is regarded as a way of addressing moral hazard and adverse selection problems?

Credit Union members who insure their mortgage debt to off-set the risk of loss of life will all ___________________________, and a Credit Union whose insured member suffers this type of loss will ________________________.

Which of the following would be the most beneficial to an internet retailer?

Contrast fee-for-service health care and a health maintain organization.

Briefly explain what is meant by the term "service contract" and provide an example.

A ___________________ arrangement exists when medical care providers are paid according to the services they provide.

_____________________ have incentives to create mechanisms that will allow them to make mutually beneficial transactions even in the face of _____________________.

In the U.S., individuals often pay a small portion of their earnings into a state _________________ pooled fund that will compensate them if they are injured on the job.

What do an optician and a lawyer share in common?

Of 1000 homeowners insured with Crown Insurance, 250 live in a flood plain, 150 live in an area with frequent tornadoes, 100 live in earthquake prone regions, and the remaining 500 reside in small communities located in less hazardous regions. Which of the following will likely apply to the low-risk group of homeowners?