Question

#32)     Under traditional common law, the damages awarded to his family for the                                        accidental death of the family breadwinner used to be

            a) The present value of his expected future earnings.

            b) The present value of his expected future earnings and pension benefits.

            c) Derived from the compensating differentials in pay for high-risk jobs.

            d) The present value of his expected future earnings and pension benefits, plus

                        punitive damages for the loss of a loved one.

            e) Zero.

#33)    You can tell a person is risk averse if

1. He/She buys insurance.
2. He/She sells insurance.
3. He/She doesn’t like skydiving.
4. He/She doesn’t value additional money after becoming really rich.
5. He/She likes skydiving.

#34) One problem with allowing people to keep their health records confidential from       insurance companies is

1. Moral Hazard
2. Adverse Selection
3. Risk Aversion
4. Risk Pooling
5. Risk Sharing

#35)     Post hoc ergo propter hoc (in Latin: After this, therefore because of this)

            a) Is a philosophical principle first advanced by Plato.

            b) Is a form of logical fallacy.

            c) Is contrary to the time reversibility of classical physics.

            d) Is the principle of causality used in the common law.

            e) None of the above.

Answer 1

32) The correct answer is A, as per the traditional common law the claimed benefits is the present value of the future earnings of the deceased family breadwinner.

33) The correct answer is A, because when a person buys insurance he wants to avoid risk and hence he is risk averse.

34) The correct answer is B the problem with the confidentiality is that it brings up the challenge and problem of adverse selection because one party becomes at disadvantage due to unavailability of the information.

35) The correct answer is B it is a logical fallacy which states that since y was followed by x hence the cause of y is X.