Ask Question, Ask an Expert


Ask Microeconomics Expert

Sally is a UT student and an athlete on the Longhorn gymnastics team. She has $22,500 in annual income and her utility function is U = I½. In any given year she faces a 25% chance of a serious sports injury. If the injury happens, medical expenditures for Sally will be $12,500. A health insurance company offers a policy that will cover all medical expenditures due to sports injuries at the premium of $4,000 per year.

(a) What is Sally's expected utility without health insurance?
(b) What is the actuarially fair premium? What is the loading fee in this case?
(c) What is Sally's maximum willingness to pay for health coverage?
(d) What is Sally's risk premium? Will she buy insurance?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M939642

Have any Question? 

Related Questions in Microeconomics

Assignment 1 markets failures and exceptionsfor each of the

Assignment 1: Markets Failures and Exceptions For each of the following situations, the market system has failed and/or just will not allocate resources efficiently: Situation 1: Firm A produces cement sifters. The proce ...

Economic paper projectthe microeconomic paper tests your

Economic Paper Project The Microeconomic Paper tests your ability to apply economic principles to a business decision. Select one situation from the items outlined below: A toD. Complete the paper on the selected situati ...

Supply and demand draw curvea define economicsb what do we

Supply and Demand Draw Curve A: Define Economics B: What do we mean by "Scarcity" and how does that relate to the concept of "Opportunity Cost"? C: Distinguish between :macroeconomics" and :microeconomics" D: Distinguish ...

Description debentive enterprise is a company listed on the

Description: Debentive enterprise is a company listed on the New York Stock Exchange. Its capital structure is as follows: equity issued at N.Y.S.E. USD 30,000 (after translation), in addition the company has a debt of U ...

Assignmentmicroeconomicsdirections unless otherwise stated

ASSIGNMENT Microeconomics Directions: Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four dou ...

Discussion questionthe value of teams in strategic

Discussion Question The Value of Teams in Strategic Management The value of teams is often described in the work product created by teams versus individuals. Using available research, how does team work differ from indiv ...

Suppose the consumerworker values two things a consumption

Suppose the consumer/worker values two things: a consumption good C and leisure L. Suppose that there are 24 hours in a day and the consumer/worker has a utility function U (C, L) = C^0.5 + L ^0.5 The price of consumptio ...

Assignmentwhen completing the las in the weekly discussions

Assignment When completing the LAs in the Weekly Discussions please follow these directions and format: In your narrative response to the LAs, start out by first clearly identifying, defining and explaining the managemen ...

Principles of economicsas part of a marketing research

Principles of Economics As part of a marketing research committee for your organization, you have been assigned the task of preparing a 700-word research paper about current microeconomic thought and theory. Use Principl ...

Assignmentthis final project paper will utilize many of the

Assignment This final project paper will utilize many of the sections of material you have studied during the duration of this course. You will make use of your own personal observations and occupational experiences to e ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate