Question: just give me the answer please 1. Consider 3 expected utility maximizing consumer with preferences represented by unite) 2 1H2 If they face a loss

 just give me the answer please 1. Consider 3 expected utilitymaximizing consumer with preferences represented by unite) 2 1H2 If they face

just give me the answer please

1.

a loss that occurs with a 15 '36 probabilty, (select all thatapply) C] fair insurance will be priced at 15 cents per dollarof coverage C] fair insurance will leave them with wealth equal totheir certainty equivalent C] they will choose to fully insure themselves with

Consider 3 expected utility maximizing consumer with preferences represented by unite) 2 1H2 If they face a loss that occurs with a 15 '36 probabilty, (select all that apply) C] fair insurance will be priced at 15 cents per dollar of coverage C] fair insurance will leave them with wealth equal to their certainty equivalent C] they will choose to fully insure themselves with fair insurance C] they will always buy more insurance than a risk neutral person Risk pooling can decrease risk if 3 Risks are independent :] Risks are dependent 3 Enough people pool their risk :] If the amount of risk is small enough 3 If people have different risk preferences A person has wealth of $40,000. If they have an accident they must spend $30,000 on car repairs. Their utility function is given by U = w1/2 , where w is equal to their wealth. They do not get into an accident with a 90% chance and they get into an accident with a 10% chance. What is the total fair premium for full insurance for this person? ADan is an expected utility maximizer with a utilitl;r function over wealth given by 15(10): 2 2t_u + 10 Dan faces a gamble of where there are equal chances to win $9 or $16. The certainty equivalent of this gamble is O 3.5 O 17 O 21f13 + 10 0 Not enough information to compute O 20

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!