Two companies in a city provide insurance for cars—Company A and B. Company A pays 100% of the money required for repair in case of an accident, while Company B pays 70% of the total money required
A research agency has found that Company A's customers have more accidents. Which of the following explains this difference? A) Moral hazard
B) Adverse selection
C) The presence of positive externalities
D) The presence of negative externalities
A
Economics
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In a state-run lottery, where winners are paid in annual installments
a. the present value of the payments is less than the number of dollars won b. the future value of the winnings is less than the number of dollars won c. the present value of the payments is greater than the number of dollars won d. the winner would prefer the annual installments to a lump sum payment made immediately e. none of the above is correct
Economics