Every person has $1,000 to spend. There are two groups of people: 100 sick people and 300 healthy people. A sick person visits the hospital with probability p= 0.25. A healthy person visits the hospital with probability p= 0.05. Any hospital visit costs $400. All individuals have the following expected utility function: EU= (1−p)√Cg+p√Cb
a) What is the actuarially fair price for a sick person? For a healthy person?b)Suppose the insurance company can distinguish between sick and healthy individuals. What price(s) will they charge each group for full insurance?
c)Suppose the insurance company cannot distinguish between sick and healthy individuals. If they charge one price to everyone for full insurance, what price x do they need to charge to make zero expected profits when everyone buys? (Hint: It is somewhere in between the actuarially fair prices, but not halfway since groups are of different sizes.)
Answers: 1
Business, 22.06.2019 01:30, bigsmokedagangsta
Iam trying to get more members on my blog. how do i do that?
Answers: 2
Business, 22.06.2019 19:20, josh200508
Advertisers are usually very conscious of their audience. choose an issue of a popular magazine such as time, sports illustrated, vanity fair, rolling stone, or the like. from that issue select three advertisements to analyze. try to determine the audience being appealed to in each advertisement and analyze the appeals used to persuade buyers. how might the appeals differ is the ads were designed to persuade a different audience.
Answers: 2
Business, 23.06.2019 03:50, beabivine7023
John is a journalist he went to a product demonstration for a new computer some of what he heard was informative while the rest was meant to persuade consumers to buy the product which two statements in the excerpt are persuasive rather than informative
Answers: 2
Every person has $1,000 to spend. There are two groups of people: 100 sick people and 300 healthy pe...
Social Studies, 01.10.2019 19:50
Mathematics, 01.10.2019 19:50
Chemistry, 01.10.2019 19:50
Mathematics, 01.10.2019 19:50
Mathematics, 01.10.2019 19:50
Mathematics, 01.10.2019 19:50