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AndrewKraus AndrewKraus
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6 years ago
Two companies in a city provide insurance for cars—Company A and B. Company A pays 100% of the money required for repair in case of an accident, while Company B pays 70% of the total money required. A research agency has found that Company A's customers have more accidents. Which of the following explains this difference?
A) Moral hazard
B) Adverse selection
C) The presence of positive externalities
D) The presence of negative externalities
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Microeconomics

Microeconomics


Edition: 1st
Authors:
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losteinlostein
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AndrewKraus Author
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#2
6 years ago
Excellent answer, thx
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