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Quiz 8 Answers - ECO 304K INTRODUCTION TO MICROECONOMICS...

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ECO 304K: INTRODUCTION TO MICROECONOMICS Unique # 33645, Fall 2009, Prof. Wiseman Quiz 8 Select the single best answer for each question. 1. Suppose the government requires life insurance companies to accept anyone as a customer, and to charge the same premiums for everyone they insure, regardless of age, medical history, gender or health habits. The effect of this would be: A. That the insurance companies would have to charge higher rates to cover the losses from those customers who are close to death when they buy a policy, so that those who were least likely to die would choose not to buy insurance at all. Only those very likely to die would buy life insurance at all and it would be very expensive B. That the insurance companies would raise rates on everyone, so that they would make a lot of money on those who were young and healthy and lose some money on those who were very likely to die C. That those very likely to die would refuse to buy life insurance at the higher rates and those who were young and working would buy more life insurance D. That more people would buy life insurance, since the rates would be more fair and since the costs of insurance could be spread across more people, premiums would probably decline
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