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Author Question: Jim used to be very careful with his car. However, once he bought full auto insurance on it, he ... (Read 8 times)

mydiamond

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Question 1

The insurance industry is susceptible to adverse selection problems, but not problems of moral hazard.


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Question 2

Jim used to be very careful with his car. However, once he bought full auto insurance on it, he stopped turning on his alarm or even locking it when parking it. This is an example of adverse selection.


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Marked as best answer by mydiamond on Apr 19, 2019

Anna

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