Why might a life insurance company insist on an individual having a physical exam before agreeing to provide life insurance to the individual?
What will be an ideal response?
The life insurance policy is a contract that transfers risk from the buyer to the seller, in this case from the individual to the company. The price of the contract is based upon certain assumptions regarding the general health of the individual and specific information such as gender, age, etc.The company wants to make sure there is not any information hidden (information asymmetry) or other problem that would significantly alter its decision to provide the coverage or the price of the coverage.
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Modern macroeconomics
A. does not do well explaining the reasons for growth B. focuses on theories of firm entry and exit from the market C. has eliminated poverty D. can be defined as the study of money
Suppose the Herfindahl-Hirschman Index (HHI) in the market for chocolate is 3,200. Two companies want to merge. The FTC definitely will challenge the merger if it increases the HHI by more than
A) 150 points. B) 100 points. C) 40 points. D) 200 points.