1: Which of the following is not a characteristic of a market surplus? A. The product's market price is higher than the equilibrium price. B. Producers reduce the product's price to bring the market to the competitive equilibrium. C. The quantity demanded for the product exceeds the quantity supplied. D. The quantity supplied exceeds the quantity demanded by consumers. Question 2: All of the following are true statements regarding factors that can cause a change in DEMAND except: A. The availability of substitutes B. Disposable income of consumers C. Customer preferences D. Deductibles Question 3: Insurance companies utilize risk pooling to: A. Lower profits B. Spread the costs generated by a small number of people over a large number of people C. Meet government regulations D. Cover as many people as possible Question 4: Insurance companies manage the problem of moral hazard and adverse selection through: A. Deductibles B. Probabilities C. Risk aversion D. Sworn statements from policy holders Question 5: A term used when one party in an agreement has an incentive, after the agreement is made, to act in manner that brings benefits to himself at the expense of the other is: A. Moral hazard B. Utility