1.Consider the data below from the Adverse Selection University (ASU). The data is of insurance status and medical expenditures for different types of professors working full-time at ASU. In 2019, every employee of ASU was offered a full insurance contract at no premium. In 2020, ASU charged any employee who wanted to keep health insurance a $4,500 premium. As a result, all psychology professors dropped their coverage in 2020. Assume that the underlying health of ASU professors did not change much from year to year.

2019 2020 Insured? Average Expenditure Insured? Average Expenditure Economics Professor Yes $5900 Yes $5900 Psychology Professor Yes $3100 No $2500