Author Question: Refer to Scenario 17.4. Moral hazard would be eliminated in this situation if A) the insurer ... (Read 56 times)

sdfghj · **on:** Jul 1, 2018

Refer to Scenario 17.4. Moral hazard would be eliminated in this situation if

A) the insurer would always charge 5000.
B) the insurer would always charge 10,000.
C) the insurer could costlessly monitor whether a flood control system is in place, and adjust the premium upward if it is not.
D) the insurer could costlessly monitor whether a flood control system is in place, and adjust the premium downward if it is not.
E) the flood did not occur.

Question 2

A sequential game is

A) another term for a repeated game.
B) another term for a cooperative game.
C) the term for a game in which individuals receive their payoffs at different times.
D) the term for a game in which individuals do not commit to strategy choices at the same time.
E) the term for a game in which each outcome occurs, one after the other, as the game is repeated over time.