Business, 14.10.2019 21:10 coryoddoc3685

Michael lives on an island and owns a beach house worth $400,000. of that, $100,000 is the cost of land and $300,000 is the cost of the structure. the probability that a hurricane destroys his house is 3percent (he will still own the land). michael can purchase hurricane insurance at the price of $2for each $100 of coverage.1. what is michael’s contingent consumption bundle if michael does not purchase insurance?

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Michael lives on an island and owns a beach house worth $400,000. of that, $100,000 is the cost of l...