Suppose you are designing a health insurance policy for a group of 5 , 0 0 0

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Question:

Suppose you are designing a health insurance policy for a group of

5, 000

young individuals. Their probability of illness is low at

3 % .

Treating illness is costly though, at $

20, 000

per case.

What is the minimum premium that you would charge each of these

5, 000

individuals for an insurance policy that completely covers their medical expenses in the case of illness?

Will this group of individuals be willing to buy such a policy? Justify your answer.

Related Book For answer-question

Microeconomics Principles, Problems and Policies

ISBN: 978-1259450242

20th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

See More Books

Posted Date: Feb 23, 2024 01:56 AM

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Suppose you are designing a health insurance policy for a group of 5 , 0 0 0

Question:

Expert Answer:

To calculate the minimum premium that each individual should be charged for the insurance policy we ... View the full answer

Microeconomics Principles, Problems and Policies

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