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i just need help with e and f which are the diagram and
whether bob would...
1) Bob's income is $90,000. There is a 20% chance Bob will get sick during the next year. If Bob gets sick, he will...
1) Bob's income is $90,000. There is a 20% chance Bob will get sick during the next year. If Bob gets sick, he will incur a loss of $27,500. His utility function is U(U)=105 (that is, utility equals the square root of Income). (25 pts) a) What is Bob's expected income? b) What is Bob's expected loss? c) What is Bob's expected utility? d) What is the maximum amount of money Bob is willing to pay for insurance? What is...
a. If your are offered a gift card valued $50 or the chance at a raffle...
a. If your are offered a gift card valued $50 or the chance at a raffle for a giftcard valued $100, with a 50% chance at getting the giftcard or a 50% chance of getting nothing, which would you choose? Given this answer explain whether you are risk averse, risk loving, or risk neutral and why. 30 50 75 100 7) The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance...
ONLY ANSWER QUESTION B, C (both c's), F (identifying i, ii, iii) & G. THANK YOU!...
ONLY ANSWER QUESTION B, C (both c's), F (identifying i, ii, iii)
& G. THANK YOU!
dud Jackson has a utility of money function given by U()- y. a) Is Jackson risk averse, risk neutral, or a risk lover? How do you know this? All of Jackson's wealth is in his land and his house; the total value is $1,000,000. With probability 0.4, the house will burn down, and Jackson's remaining wealth will be only the value of the land,...
Understanding demand for health insurance is a key to formulating good health policy. In this question...
Understanding demand for health insurance is a key to formulating good health policy. In this question you will model how much people are willing to pay for a health insurance plan. Here are our starting assumptions: - the consumer has an income of $49 next year - if he gets sick he will have to pay $40 for medicine - he has a 20% chance of getting sick (a) Suppose your utility function is ?(?) = √? . Calculate the...
I need help with part c & d! Kisk Pooling Ollante Pobabilities of those outcomes used...
I need help with part c & d!
Kisk Pooling Ollante Pobabilities of those outcomes used as J U U possible out 9 Spreoding the Spreading the risk of a payout over a lo group of people 2. Suppose that there are two possible states, completel of $80,000 if they remain completely healthy. H here are two possible states, completely healthy and ill. Consider an individual who has an income textbook and represents the total (actual) and expected wy remain...
2) (20 points) Lynn has a utility function U(W) = W1/2, where W is the amount...
2) (20 points) Lynn has a utility function U(W) = W1/2, where W is the amount of wealth that she has. Lynn has two assets. She has $40,000 in a bank account, and she has a house worth $600,000, so her total wealth is initially $640,000. There is a 2% chance that her house is destroyed by a fire. a) (4 points) Considering the probability that there is a fire, what is Lynn’s Expected Wealth, E(W)? E(W) = ____________________________ b)...
3. 10 marks total] Suppose that a farmer faces a random weather shock, which could result in a good or bad outcome. The...
3. 10 marks total] Suppose that a farmer faces a random weather shock, which could result in a good or bad outcome. There is a 60 percent chance that the good outcome will arise, which yields $800 of consump- tion. In the event of a bad outcome, consumption will equal $200. As- sume that utility follows log form, such that U(Y) = ln(Y), where Y is consumption (a) 1 mark] Is the farmer risk averse? Why or why not? (b)...
health economics and policy how do I calculate the following: if the insurance company must offer...
health economics and policy
how
do I calculate the following: if the insurance company must offer
one plan to all women ages 65 and older, what will be the monthly
premiun per person? and the surplus?
Case Study 2 Suppose that within a given city, women ages 65 and older fall into one of four health categories very healthy, healthy, unhealthy, and very unhealthy. As a part of the new PPACA, the government has mandated that insurance companies must charge...
1. Angela spends all her income on cats (C) and artistie baby pictures (B). Cats cost...
1. Angela spends all her income on cats (C) and artistie baby pictures (B). Cats cost $20 per pound a baby pictures costs $10 per sq. ft. Assume that Angela has $300 to spend and her utility function cam be represented as U(C,B) = CSB (put B on the y-axis). A) Find the MRS and the price ratio B) Find the optimal number of cats and baby pictures for Angela to purchase. What is her utility C) If the price...
A health insurance company knows that there are two types of customers (smokers and non-smokers), each...
A health insurance company knows that there are two types of customers (smokers and non-smokers), each facing different health risks. The probabilities of getting sick and the healthcare costs in the case of illness for the two customer types is given in the table below. Group Healthcare costs Probability of getting sick Smokers $1200 50% Non-smokers $1200 20% Assume that each customer has a monthly income of $1600 and has a utility function given by U(x)=sqrt(x), where x is the...
1) Bob's income is $90,000. There is a 20% chance Bob will get sick during the next year. If Bob gets sick, he will incur a loss of $27,500. His utility function is U(U)=105 (that is, utility equals the square root of Income). (25 pts) a) What is Bob's expected income? b) What is Bob's expected loss? c) What is Bob's expected utility? d) What is the maximum amount of money Bob is willing to pay for insurance? What is...
a. If your are offered a gift card valued $50 or the chance at a raffle for a giftcard valued $100, with a 50% chance at getting the giftcard or a 50% chance of getting nothing, which would you choose? Given this answer explain whether you are risk averse, risk loving, or risk neutral and why. 30 50 75 100 7) The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance...
ONLY ANSWER QUESTION B, C (both c's), F (identifying i, ii, iii)
& G. THANK YOU!
dud Jackson has a utility of money function given by U()- y. a) Is Jackson risk averse, risk neutral, or a risk lover? How do you know this? All of Jackson's wealth is in his land and his house; the total value is $1,000,000. With probability 0.4, the house will burn down, and Jackson's remaining wealth will be only the value of the land,...
I need help with part c & d!
Kisk Pooling Ollante Pobabilities of those outcomes used as J U U possible out 9 Spreoding the Spreading the risk of a payout over a lo group of people 2. Suppose that there are two possible states, completel of $80,000 if they remain completely healthy. H here are two possible states, completely healthy and ill. Consider an individual who has an income textbook and represents the total (actual) and expected wy remain...
3. 10 marks total] Suppose that a farmer faces a random weather shock, which could result in a good or bad outcome. There is a 60 percent chance that the good outcome will arise, which yields $800 of consump- tion. In the event of a bad outcome, consumption will equal $200. As- sume that utility follows log form, such that U(Y) = ln(Y), where Y is consumption (a) 1 mark] Is the farmer risk averse? Why or why not? (b)...
health economics and policy
how
do I calculate the following: if the insurance company must offer
one plan to all women ages 65 and older, what will be the monthly
premiun per person? and the surplus?
Case Study 2 Suppose that within a given city, women ages 65 and older fall into one of four health categories very healthy, healthy, unhealthy, and very unhealthy. As a part of the new PPACA, the government has mandated that insurance companies must charge...
1. Angela spends all her income on cats (C) and artistie baby pictures (B). Cats cost $20 per pound a baby pictures costs $10 per sq. ft. Assume that Angela has $300 to spend and her utility function cam be represented as U(C,B) = CSB (put B on the y-axis). A) Find the MRS and the price ratio B) Find the optimal number of cats and baby pictures for Angela to purchase. What is her utility C) If the price...
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