Question: May I please get some help with this question? There is no information aside from what is attached. Suppose that halfthe population is healthy and

May I please get some help with this question? There is no information aside from what is attached.

May I please get some help with this question? There is no

Suppose that halfthe population is healthy and the other half is unhealthy. If an insured healthy person gets sick, the full cost to the insurance company is $2,000. If an insured unhealthy person gets sick, the cost to the insurance company is $10,000. In a given year, any one person (healthy or unhealthy) has a 40% chance of getting sick, People know whether they are healthy but the insurance company does not. The insurance company offers complete, actuarially fair insurance at the same price to everyone. The insurance company covers all medical expenses of its policyholders, and its expected prot is zero. If everyone purchases insurance, what is the price of the insurance? The price of insurance for everyone is $ t (round your answer to the nearest dollar) If only unhealthy people purchase insurance, what is the price of the insurance? Price of insurance for unhealthy people only is S . (round your answer to the nearest dollar) Given that each person has the option to purchase insurance, which type actually purchases insurance? What is the price of the insurance? Discuss the adverse selection problem. 0 A. There is not an adverse selection problem because both groups buy insurance 0 B. There is an adverse selection problem because only healthy people buy insurance 0 c. There is not an adverse selection problem because only unhealthy people buy insurance 0 D. There is an adverse selection problem because only unhealthy people buy insurance

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