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Economics Chapter 16 Test Bank
Multiple Choice Questions
1. A ____________________ is a promise that the buyer’s money will be refunded under
certain conditions.
A. money-back guarantee
B. warranty
C. service contract
D. insurance policy
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
2. A ______________ is a promise to fix or replace the good, at least for a certain period of
time.
A. service contract
B. insurance policy
C. money-back guarantee
D. warranty
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
3. A ________________ exists when the buyer pays an extra amount and the seller agrees to
fix anything that goes wrong for a set time period.
A. warranty
B. money-backed guarantee
C. service contract
D. money-back warranty
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
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4. _____________________ that are issued by government agencies are a form of validation
that a worker has completed a certain type of education or passed a certain test.
A. Occupational licenses
B. Industrial licenses
C. Service contract licenses
D. Occupational insurance licenses
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
5. Another person or firm who legally pledges to repay some or all of the money loaned if the
original borrower fails to do so is called a __________________________ .
A. warrantor
B. cosigner
C. guaranty
D. codebtor
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
6. __________ is something valuable that a lender would have a right to________________ if
the loan is not repaid.
A. Collateral; sue for
B. A guarantee; seize and retain
C. A guarantee; sell
D. Collateral; seize and sell
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
7. When Morty leased his new car, he was required by law to _________ to ______________
of financial loss caused by a vehicle collision.
A. pledge collateral; reduce the chance
B. pay extra for a warranty; eliminate the risk
C. purchase insurance; reduce the risk
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D. receive a free service contract; eliminate any chance
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
8. Payments made to an insurance company in return for a policy of insurance are called
_________________ .
A. risk expenses
B. premiums
C. risk expenditures
D. deductibles
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
9. In the insurance industry, homeowners are referred to as ___________ who share roughly
the same risks of an adverse event occurring.
A. a risk group
B. an adverse group
C. an uninsurable group
D. a premium group
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
10. When people have insurance against a certain event, the notion that those people are less
likely to guard against that event occurring is called a _____________________ .
A. risk
B. hazard risk
C. moral hazard
D. moral risk
Answer: C
Reference:
Explanation:
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Economics Chapter 16 Test Bank
Multiple Choice Questions
1. A ____________________ is a promise that the buyer’s money will be refunded under
certain conditions.
A. money-back guarantee
B. warranty
C. service contract
D. insurance policy
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
2. A ______________ is a promise to fix or replace the good, at least for a certain period of
time.
A. service contract
B. insurance policy
C. money-back guarantee
D. warranty
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
3. A ________________ exists when the buyer pays an extra amount and the seller agrees to
fix anything that goes wrong for a set time period.
A. warranty
B. money-backed guarantee
C. service contract
D. money-back warranty
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
This file is copyright 2023, Rice University. All Rights Reserved.
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4. _____________________ that are issued by government agencies are a form of validation
that a worker has completed a certain type of education or passed a certain test.
A. Occupational licenses
B. Industrial licenses
C. Service contract licenses
D. Occupational insurance licenses
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
5. Another person or firm who legally pledges to repay some or all of the money loaned if the
original borrower fails to do so is called a __________________________ .
A. warrantor
B. cosigner
C. guaranty
D. codebtor
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
6. __________ is something valuable that a lender would have a right to________________ if
the loan is not repaid.
A. Collateral; sue for
B. A guarantee; seize and retain
C. A guarantee; sell
D. Collateral; seize and sell
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
7. When Morty leased his new car, he was required by law to _________ to ______________
of financial loss caused by a vehicle collision.
A. pledge collateral; reduce the chance
B. pay extra for a warranty; eliminate the risk
C. purchase insurance; reduce the risk
This file is copyright 2023, Rice University. All Rights Reserved.
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D. receive a free service contract; eliminate any chance
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
8. Payments made to an insurance company in return for a policy of insurance are called
_________________ .
A. risk expenses
B. premiums
C. risk expenditures
D. deductibles
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
9. In the insurance industry, homeowners are referred to as ___________ who share roughly
the same risks of an adverse event occurring.
A. a risk group
B. an adverse group
C. an uninsurable group
D. a premium group
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
10. When people have insurance against a certain event, the notion that those people are less
likely to guard against that event occurring is called a _____________________ .
A. risk
B. hazard risk
C. moral hazard
D. moral risk
Answer: C
Reference:
Explanation:
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