Insurance, Microeconomics

Assignment Help:
Sita expects her future earnings to be worth Rs 100. If she falls ill, her expected future earning will be Rs 25, There is a belief that she may fall ill 2 with probability of -3 while the probability of remaining in good health is 3. Let her utility function be given as u(y)= y Suppose that an insurance company offers to fully insure sita against loss of earnings caused by illness against an actuarially fair premium.

(a) Will Sita accept the insurance Explain

(b) What is the maximum amount that Sita would pay for the insurance?


Related Discussions:- Insurance

Introduction, when does market equilibrium occur?

when does market equilibrium occur?

Demand, demand elasticity in urdu

demand elasticity in urdu

Asymmetric information - insurance markets, Q. Asymmetric Information - Ins...

Q. Asymmetric Information - Insurance Markets? In the United States, health insurance is usually provided for employees through contracts between the insurance company and thei

Sylos labini model, How we constract the cost structure of firms

How we constract the cost structure of firms

Effects of inflation, Effects of inflation: On Income Earners:Those on...

Effects of inflation: On Income Earners:Those on fixed incomes or assets (fixed in nominal terms) lose. However, those on incomes, which are directly related to the price leve

Economics 262, A recent national survey found that high school students wat...

A recent national survey found that high school students watched an average (mean) of 7.2 DVDs per month with a population standard deviation of .90. A random sample of 35 college

Concept and meaning of infrastructure, CONCEPT AND MEANING OF INFRASTRUCTUR...

CONCEPT AND MEANING OF INFRASTRUCTURE: Infrastructure sectors are the backbone of a national economy. It has been commonly opined that infrastructure development is closely re

Price elasticity of demend, hoe does the knowledge of price elasticity of d...

hoe does the knowledge of price elasticity of demand important to the government

Market, describe engineering cost theory in detail

describe engineering cost theory in detail

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd