This topic contains a solution. Click here to go to the answer

Author Question: The rules of accounting generally require that ________ be included in a firm's financial records. ... (Read 98 times)

abarnes

  • Hero Member
  • *****
  • Posts: 556
The rules of accounting generally require that ________ be included in a firm's financial records.
 
  A) only explicit costs B) both explicit costs and implicit costs
  C) only implicit costs D) neither explicit costs nor implicit costs

Question 2

How can an insurance company offer people a deal worth taking? Why do both the buyers and the sellers of insurance gain?
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

yifu223

  • Sr. Member
  • ****
  • Posts: 302
Answer to Question 1

A

Answer to Question 2

Insurance companies work by pooling risks so that everyone pays into the pool but only the (small) fraction of people who suffer a loss are paid from the pool. Although the likelihood of a bad occurrence is small for each individual, for a large enough group the total number and total amount of losses can be estimated very closely. The insurance company can calculate the size of the pool required to cover losses. From this calculation the company can compute the amount of the premium each person must pay into the pool to cover all the anticipated losses and other costs the company incurs. People buy insurance because they are risk averse; they want to avoid unwanted outcomes. Insurance is worth buying because people are willing to give up a relatively small amount of income all the time to guarantee that they do not face the uncommon occurrence of having to give up a large amount of income since this deal increases their expected utility. An insurance company will always try to take in more in premiums paid than claims paid out to claimants so that their owners receive at minimum a normal profit.




abarnes

  • Member
  • Posts: 556
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it


lcapri7

  • Member
  • Posts: 350
Reply 3 on: Yesterday
Great answer, keep it coming :)

 

Did you know?

In 2006, a generic antinausea drug named ondansetron was approved. It is used to stop nausea and vomiting associated with surgery, chemotherapy, and radiation therapy.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

The average office desk has 400 times more bacteria on it than a toilet.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

For a complete list of videos, visit our video library