Fire insurance policies include deductibles:
a. because when it comes to fire, most people are risk-averse.
b. because it is too expensive to insure fully something against fire.
c. to minimize moral hazard.
d. to maximize adverse selection.
used-car dealers will often advertise how long they have been in business as a means of their long-term
a. signaling; reputation
b. screening; customers
c. insuring; capital at risk
d. revealing; moral hazard

Read the following paragraph, and choose the best revision for one of its sentences. dr. blake is retiring at the end of the month. there will be an unoccupied office upon his departure, and it is big in size. because every other office is occupied, we should convert dr. blake’s office into a lounge. it is absolutely essential that this issue is discussed at the next staff meeting. (a) because every other office is occupied, it’s recommended that we should convert dr. blake’s office into a lounge. (b) because every other office is filled, we should convert dr. blake’s office into a lounge.