Question: d. Now consider the same problem in a graph with y2 , the consumption level when healthy, on the horizontal axis and y1 , the

d. Now consider the same problem in a graph with y2

, the consumption level when healthy, on the horizontal axis and y1

, the consumption level when sick, on the vertical. Illustrate the “endowment point” E 5 1y1

, y2 2 that both types face in the absence of insurance.

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