Q.

An example of adverse selection is

A. purchasing a new car sight unseen based on the recommendation of a neighbour.
B. high health insurance premiums resulting from the poor health of people who buy policies.
C. suppliers who charge more for better quality clothing than for lower quality clothing.
D. being talked into buying a low-quality item because the price is lower.
Answer» B. high health insurance premiums resulting from the poor health of people who buy policies.
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