Consumers pay for necessities out of their discretionary income

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t2. What is the marginal cost?

A) 5 B) 5t C) 10 D) 10t

All of the following statements about regulatory objectives of insurance rate making are true EXCEPT

A) One purpose of rate adequacy is to maintain the solvency of insurers. B) Rates unfairly discriminate if loss exposures that are similar with respect to losses and expenses are charged substantially different rates. C) Insurers know in advance if the coverages marketed will be profitable, so rate regulation is not needed. D) Rates are excessive if policyholders are paying substantially more than the actual value of their protection.