Suppose an insurance company has estimated that 20 percent of all of its potential policy owners are high-cost and sets a price for their insurance policy with the understanding that 20 percent of its policy owners will be high-cost. If the true percentage of high-cost potential policy owners is 40 percent, the insurance company is likely to face ________.

What is the Federal Trade Commission?

What will be an ideal response?

Which one of the following is an example of the circular flow of GDP and shows the interdependence of households and firms?

a. Households demand their resources from the firms in the resource market and, in turn, supply in the product market the goods and services produced by firms b. The firms go to the resource market to supply resources that households demand and, inin turn, provide households with the goods and services produced for the product market. c. Households supply resources to firms in the resource market and, in turn, demand in the product market the goods and services produced by the firms. d. The firms in the resource market pay to households in the form of wages, interest, rent, and profit—for resources demanded. e. The circuit is completed when the payments flow from households, through the product market, and to the firms for the goods and services they demand.