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rk (Ch 20) Average: 13 Suppose there are two types of individuals: those with $112,000.00 in the bank and those with $2,800.00 in the bank. Assume that individuals with $2,800.00 in the bank declare bankruptcy If they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. nsurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.)
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