On car insurance policies, Countrywide Insurance Company offers drivers an option: Policy 1 features a deductible of $1,000, and it requires a driver to pay an annual premium of $500 . Policy 2 features a deductible of $250, and it requires a driver to pay an annual premium of $1,000
a. In offering these two policies, Countrywide is engaging in illegal price discrimination.
b. In offering these two policies, Countrywide is screening drivers.
c. Policy 1 is more of a burden for safe drivers than it is for risky drivers.
d. In offering these two policies, Countrywide is signaling their quality to drivers.
b
You might also like to view...
According to your authors, the following is a necessary condition for a competitive market:
A) Large numbers of buyers and sellers B) Full and complete information C) Freedom of entry D) Identical products E) All of the above.
A judicial system for resolving disputes creates benefits even for people who never use it because
A) people are compelled to obey court decisions whether they want to or not. B) judicial decisions generate uniform rules, which everyone can count on. C) silence gives consent. D) the social contract entitles everyone to share in the benefits from goods produced by government.