When does an insurance contract benefit both the parties?
Insurance is a contract that reallocates risk between the insurer and the insured. This exchange of risks benefits both sides of the contract if they have different degrees of aversion or different abilities to bear risk.
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A person is given the opportunity to volunteer at a local food bank. They consider the other things they could do at that time, such as cleaning and watching TV. They know that the work that they do could really benefit people at the food bank, whereas the other activities only benefit themselves. They decide that the service is the best decision for them. What type of ethical theory does their though process and decision follow?
a. rule utilitarianism b. act utilitarianism c. deontological theory d. ethical egoism
An economy that does NOT trade with the rest of the world is a(n)
A. open economy B. trade economy C. closed economy D. command economy