The competitive price of full insurance for a 20% chance of a loss of $500 through...
The competitive price of full insurance for a 20% chance of a loss of $500 through adverse weather conditions is: a. $20. b. $100. c. $250. d. $500 e. Cannot tell without knowing the person’s wealth.
Homework Answers
| There is a 20% chance of a loss of $500. | ||||
| The cost of insurance is (.20*500) | ||||
| The competitive price for full insurance is | ||||
| b) $100. | ||||
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The competitive price of full insurance for a 20% chance of a
loss of $500 through...
The answers are 19. D 20. B 21. E Please show work Thanks Harry is risk...
The answers are
19. D
20. B
21. E
Please show work
Thanks
Harry is risk averse, with utility of wealth U(W) W2. His future wealth is random, due to the probability of 0.20 percent that he will have an accident which would reduce his wealth to $10,000. If he does not have an accident, his wealth will be $250,000. Harry's expected utility of future wealth without insurance against loss equals: a) 199.80 19. b) 288.60 c) 368.40 d) 499.20...
1. Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss...
1. Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and that if a loss occurs, her home is totally destroyed. Suppose that Rhoda purchases a full insurance contract from Acme Insurance for an actuarially fair premium. This contract would pay losses due to the total destruction of Rhoda’s home. Assume that Rhoda’s contract is the only...
20) According to the diagram below Which of the following statements is correct? Price level a)...
20) According to the diagram below Which of the following statements is correct? Price level a) The economy is in equilibrium at full employment b) Fiscal policy can be freely used to achieve full employment without risking a rise in the price level c) The use of fiscal policy to achieve full employment will bring about a rise in the price level d) Monetary policy can be freely used to achieve full employment without risking a rise in the price...
Price 25 III VI ---- -1 10 20 30 - Figure 3: Competitive firm Consider Figure...
Price 25 III VI ---- -1 10 20 30 - Figure 3: Competitive firm Consider Figure 3, above. The loss in producer's surplus resulting from a decrease in price from $15 to $105 a) $25 b) 510 C) 5130 d) $50 e) $70 f) $90
13. A competitive firm uses two inputs, xi and x2 . Total output is the square...
13. A competitive firm uses two inputs, xi and x2 . Total output is the square root of xı times the square root of x2: y= x;"><= V V x2 = x,x3 The price of xı is $17 and the price of x2 is $11. The company minimizes its costs per unit of output and spends $561 on xi. How much does it spend on x2? a. $766 b. $480 C. $655 d. $561 e. Cannot be determined without knowing...
Part A An insurance company initially is insuring a pool of 200 people, each of whom has a 5% chance of a $10,000 loss d...
Part A An insurance company initially is insuring a pool of 200 people, each of whom has a 5% chance of a $10,000 loss due to illness. Answer the following questions based on this information, plus any additional information provided. (I.) How many people does the insurer expect to file a claim for the $10,000, and what will be the total dollar amount of all those claims combined? Group of answer choices a. 20 people, for a total of $200,000...
500 1000 1500 16) The above figure shows the demand and supply curves in the market...
500 1000 1500 16) The above figure shows the demand and supply curves in the market for milk. If the government imposes a quota at 500 gallons, calculate the change in the consumer surplus. Assume that prices stay the same. A) ACS--150 D) ACS- 200 C) ACS--500 B) aCS--250 a, 17) The above figure shows supply and demand curves for milk. In an effort to help farmers, the passes a law that establishes a s3 per gallon price support. To...
a. If the monopoly firm is not allowed to price discriminate, then consumer surplus amounts to ________________________...
a. If the monopoly firm is not allowed to price discriminate,
then consumer surplus amounts to
_______________________________
b. If the monopoly firm perfectly price discriminates, then
consumer surplus amounts to _______________________________
c. If the monopoly firm is not allowed to price discriminate,
then the deadweight loss amounts
_______________________________
d. If the monopoly firm perfectly price discriminates, then the
deadweight loss amounts to _______________________________
e. If there are no fixed costs of production, monopoly profit
without price discrimination equals
_______________________________
f....
Given the following total cost function facing a perfectly competitive firm: TC = 500 + 10q2...
Given the following total cost function facing a perfectly competitive firm: TC = 500 + 10q2 (a) If price = 100, determine the level of output and profit earned by the firm in the short-run. (b) Based on your answer for part (a), should the firm continue to produce in the short- run? Why or why not? (c) Graphically illustrate a perfectly competitive firm earning a positive profit, zero profit, and incurring a loss in the short-run.
There is a 1 percent chance (0.01) that you will have a medical bill of $100,000;...
There is a 1 percent chance (0.01) that you will have a medical bill of $100,000; 19 percent chance (0.19) that you will have a medical bill of $10,000; 60 percent chance (0.6) that you will have a medical bill of $500; and 20 percent chance (0.2) that you will have a medical bill of $0. A) What is your expected medical spending, without any insurance? B) If you have complete insurance (i.e. zero deductible, zero copay), what is your...
The answers are
19. D
20. B
21. E
Please show work
Thanks
Harry is risk averse, with utility of wealth U(W) W2. His future wealth is random, due to the probability of 0.20 percent that he will have an accident which would reduce his wealth to $10,000. If he does not have an accident, his wealth will be $250,000. Harry's expected utility of future wealth without insurance against loss equals: a) 199.80 19. b) 288.60 c) 368.40 d) 499.20...
20) According to the diagram below Which of the following statements is correct? Price level a) The economy is in equilibrium at full employment b) Fiscal policy can be freely used to achieve full employment without risking a rise in the price level c) The use of fiscal policy to achieve full employment will bring about a rise in the price level d) Monetary policy can be freely used to achieve full employment without risking a rise in the price...
Price 25 III VI ---- -1 10 20 30 - Figure 3: Competitive firm Consider Figure 3, above. The loss in producer's surplus resulting from a decrease in price from $15 to $105 a) $25 b) 510 C) 5130 d) $50 e) $70 f) $90
13. A competitive firm uses two inputs, xi and x2 . Total output is the square root of xı times the square root of x2: y= x;"><= V V x2 = x,x3 The price of xı is $17 and the price of x2 is $11. The company minimizes its costs per unit of output and spends $561 on xi. How much does it spend on x2? a. $766 b. $480 C. $655 d. $561 e. Cannot be determined without knowing...
500 1000 1500 16) The above figure shows the demand and supply curves in the market for milk. If the government imposes a quota at 500 gallons, calculate the change in the consumer surplus. Assume that prices stay the same. A) ACS--150 D) ACS- 200 C) ACS--500 B) aCS--250 a, 17) The above figure shows supply and demand curves for milk. In an effort to help farmers, the passes a law that establishes a s3 per gallon price support. To...
a. If the monopoly firm is not allowed to price discriminate,
then consumer surplus amounts to
_______________________________
b. If the monopoly firm perfectly price discriminates, then
consumer surplus amounts to _______________________________
c. If the monopoly firm is not allowed to price discriminate,
then the deadweight loss amounts
_______________________________
d. If the monopoly firm perfectly price discriminates, then the
deadweight loss amounts to _______________________________
e. If there are no fixed costs of production, monopoly profit
without price discrimination equals
_______________________________
f....
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