Question: Fill in the table below with your two WTP calculations. WTP WTA High Risk Aversion Low Risk Aversion 750 Notice insurers' willingness to accept

Fill in the table below with your two WTP calculations. WTP WTA

 

Fill in the table below with your two WTP calculations. WTP WTA High Risk Aversion Low Risk Aversion 750 Notice insurers' willingness to accept (WTA) for insurance is the same for both types of people. This is because for both types of people the expected cost to the insurer is $750 (0.15 x $5,000). 750 Which type of person earns the insurer higher expected profits, people with high or low levels of risk aversion? Would both of these markets form if their were perfect informa- tion? 5pt

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