Author Question: The CEO of British Petroleum decided that the company needed to add a goal to its worldwide ... (Read 41 times)

brutforce · **on:** Jun 30, 2018

The CEO of British Petroleum decided that the company needed to add a goal to its worldwide operations. That goal was
A) to be a good corporate citizen.
B) to focus on drilling and not exploration.
C) to focus on exploration and not drilling.
D) to enter the Chinese market.

Question 2

How do insurance companies try to reduce: 1) the moral hazard problem; 2) the adverse selection problem?

annierak · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

Insurance companies attempt to reduce moral hazard problems by requiring patients to pay higher deductibles or copayments thereby compelling the insured to share a greater proportion of incurred costs. Insurers can reduce adverse selection risk by limiting the period of open enrollment in health insurance plans, requiring physical exams, and insuring entire groups, thereby ensuring a diversity of health statuses.