Appendix C 3 Marianne has just graduated from college and as part of her orientation in her new job she must choose the type of health insurance plan she would like

132. (p. 627) Home-based business owners add a ________ to their homeowner’s insurance policy to ensure that

they have adequate coverage.

A. deductible unit

133. (p. 626) ________ insurance replaces part of your income if you become unable to work for an extended

period of time.

A. Product liability

134. (p. 625) A person is most likely to be pleased with an HMO for health coverage if he or she:

D. likes the idea of having a medical spending account that can be used for most routine expenditures without

having to get approval from the carrier.

135. (p. 626) One benefit of Preferred Provider Organizations (PPOs) compared to Health Maintenance

Organizations (HMOs) is that PPOs:

A. offer lower costs for members.

136. (p. 626) A characteristic of a medical savings account that distinguishes it from other types of health care

coverage is that it:

D. provides unlimited access to routine medical services (such as office visits) and minor medical tests and

procedures (such as blood tests and X-rays) at no cost.

137. (p. 626) Marianne has just graduated from college and as part of her orientation in her new job she must

choose the type of health insurance plan she would like. She is new to the area and really wants to budget

carefully as she would like to buy a new home as soon as she saves up enough money. She considers herself a

healthy young person of 22. Which of the following pieces of advice is the most sensible for her to follow in

choosing an insurance plan?

D. The more expensive PPO is the only safe bet since under that plan Marianne will be able to choose the

doctor she wants to see.

138. (p. 626) ________ insurance guarantees payment of wages, medical care, and rehabilitation services for

employees who are injured on the job.

D. Malpractice

139. (p. 626) __________ insurance provides benefits to the survivors of workers who die as a result of

work-related injuries.

A. Health

140. (p. 626) Workers’ compensation insurance:

141. (p. 626) Sasha has a small jewelry business with only four employees. He started his business month before

last and so far he makes just enough to pay his bills each week. Yesterday, just before the end of his first quarter

in business, he received a notice from the government indicating that he needed to provide evidence of workers’

compensation insurance. Sasha:

D. doesn’t need workers’ compensation because he is not in the construction business.

142. (p. 629) The risk of damaging the global environment is:

D. only relevant to China.

143. (p. 627) The risk of environmental harm is __________ in proportions in issues such as global warming.

A. local

144. (p. 629) Businesses such as Home Depot and FedEx are:

A. dramatically increasing the amount of greenhouse gases in the world.

D. not be needed since other inexpensive fuel sources haven’t been fully developed.

146. (p. 629) Risk management now means the evaluation of:

D. political risks in South America.

147. (p. 628-629) Trevino is a silversmith and works with various metals. At the end of the day, he reclaims and

separates each metal by using an inexpensive toxic acid though other methods are available. The risk of fire as

well as health dangers to Trevino is unknown. Trevino should:

A. dispose of the used acid by pouring it down the drain since the government will take care of any

environmental issues that come from polluting the water.

148. Explain the four ways of managing risk.

149. Explain the difference between speculative risk and pure risk. Which type of risk is of more concern to

businesspeople?

150. Explain what makes the acceptance of risk possible for insurance companies.

151. Discuss the difference between HMOs and PPOs.

152. Explain the benefits of workers’ compensation. Who is required to carry this type of insurance?

153. (p. 623) Bookworm sales have been down for the last year due to new competition from a national chain and

Waata is understandably concerned. He recently called his insurance agent to see if this downturn in sales was

covered by his business policy. The agent, Will B. Safe, told Waata:

D. the company would definitely cover Waata’s losses.

154. (p. 624) One of Waata’s staff members had been out on sick leave because she had an emergency

appendectomy. She brought the hospital bills in to Waata for his opinion. It seems she had been covered by two

health insurance policies for some time and now she thinks she may be able to collect from both companies in

payment for the operation. Watta assured his employee that:

D. because her risk was insurable, she would be able to collect from both insurance policies.

155. (p. 626) When one of Waata’s employees was stocking a particularly high shelf one morning he reached a bit

too far and fell off the ladder. Luckily he just broke his arm and returned to work later that day. His medical

bills due to this accident were covered under:

D. his own health insurance.

156. (p. 626) Waata carries health insurance for his family and his staff and their families. While it is a bit more

expensive, the policy allows everyone to choose their own doctor. Further, members of the plan have to pay a

deductible each year before the insurance will pay any bills. Waata and his staff and families have health

insurance with a(n):

D. DOC.

157. (p. 628, figure C.2) One afternoon Waata was called to the café. One of Waata’s staff had inadvertently spilled

hot coffee on a customer’s arm and the customer was left with a burn. Waata sent the customer off to the local

hospital for treatment knowing that his __________ insurance would cover the claim.

D. major medical

AppC Summary