uestion Completion Status: QUESTION 10 You offer an extended warranty for your p

Question

uestion Completion Status: QUESTION 10 You offer an extended warranty for your product that is purchased by a few customers. If the product typically falls 4% of the time. a. you should price the warranty at exactly 4% of the product price @ b.you should price the warranty at less than 4% of the product price C. Cannot tell from this information @ d.you should price the warranty at more than 4% of the product price QUESTION 11 Economists discourage homeowner bailouts because a. They encourage irresponsible botrowings Click Save and Submit to save and submit. Click Save All Answers to save all answers e All Answers oe 3 5 Alt Ctrl

Explanation / Answer

10. Answer: d

Since the average rate of failure is 4%, the price should be higher than that for preventing adverse selection and moral hazard tendencies. Consumers would not handle the product carelessly.

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