Author Question: Actual insurance premiums charged by insurance companies may exceed the actuarially fair rates ... (Read 59 times)

mpobi80 · **on:** Jul 1, 2018

Actual insurance premiums charged by insurance companies may exceed the actuarially fair rates because:

A) the insurance companies have monopoly rights issued by state regulators.
B) the insurance companies are risk averse.
C) there are administrative costs and other expenses that must be covered by the premia.
D) insurance companies tend to over-state the risks they face.

Question 2

Which of the following goods has a low, but positive, income elasticity of demand?

A) furniture.
B) new cars.
C) health insurance.
D) all of the above
E) none of the above