In the classic 1944 movie Double Indemnity, Barbara Stanwyck plays Phyllis Dietrichson, a woman who has devised a scheme with insurance agent Walter Neff, played by Fred MacMurray, to trick her husband into signing a life insurance policy and then kill
him to collect the proceeds of the policy. In this scheme to murder her husband, Phyllis and her partner Walter took advantage of the husband when getting him to sign the life insurance policy, a situation which describes
A) rational ignorance.
B) the principal-agent problem.
C) adverse selection.
D) moral hazard.
Answer: C
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