Efficient Insurance Supply: Technical Conditions Quiz
3 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which condition is necessary for the existence of efficient insurance supply?

  • Risk probability is greater than one
  • There is no moral hazard (hidden action) (correct)
  • Risk probability is unknown and cannot be estimated
  • Probabilities of risks are not independent across individuals

    • What is a necessary condition for the existence of efficient insurance supply?

  • Probabilities of risks are independent across individuals (correct)
  • Risk probability is strictly less than one
  • Risk probability is unknown and cannot be estimated
  • There is no adverse selection (hidden knowledge)

    • Which condition must be met for efficient insurance supply to exist?

  • Risk probability is known and could be estimated (correct)
  • Risk probability is greater than one
  • Probabilities of risks are not independent across individuals
  • Adverse selection is present (hidden knowledge)

    • More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser