Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Suppose there are two types of drivers on the road. Speed Racers have a 7% chance of causing an accident per year, while Low Riders have a 2% chance of causing an accident per year. There are the same number of Speed Racers as there are Low Riders. The cost of an accident is $20,000.
a. Suppose the insurance companies know with certainty each driver’s type. What would be the actuarially fair premium that the company would charge each type of driver?
b. Now suppose there is asymmetric information so that the insurance company does not know with certainty each driver’s type. What will happen if the insurance company asks drivers to self-report their type?
c. What will happen if the insurance company admits that it has no idea which drivers are Speed Racers and offers one insurance plan at a price that is based on the average risk across all drivers? Explain the problem of adverse selection in this context.
Assume Hailey's Utility Function is U = x^2 y . The price of X is $8 per unit and the price of Y is $2 per unit. Her income is currently $240 / month. Determine her utility maximizing quantities of x and y. Suppose the price of X goes down to $4 per ..
Measles has become an epidemic here in Orange County. About 1 in 1000 people will die after contracting the disease. Because this is such a high rate, health officials in Orange County would be well advised to pay for anyone to get a vaccination.
What is the independent variable? What is the dependent variable? What is the intercept? What is the slope? Which equation represents demand side? Which equation represents supply side? What are endogenous variables in this model? What are exogenous ..
Explain four major potential advantages of foreign direct investment for a developing country? Provide specific example of a developing country to depict at least two advantages
Home price escalation in the U.S. during 2005 fuelled booms in:
Sketch the indifference curves implied by each of the following statements:
systems analysis and design ndash the movement to objectspart 1 answer the module review questions listed below. these
Due to limited borrowing options, the government may ask the central bank to print money. We also learned that the real seinorage revenue of the government depends on inflation and real money holding of the public, that is R= \prodM/P?. Explain the c..
If you were a manager of a large manufacturing company and decided to offshore labor-intensive production to another country, how would you justify the decision to your employees and the community
5.the benefit of cutting down a forest is 1 million now. the environmental cost of that harvest is 10year forever.1 at
Suppose the National Commerce Bank has just started its operation with $10 million of Capital. On the first day, it receives total checkable deposits of $90million. The bank makes $30 million commercial loans and as safe investment it buys T-bill for..
Super Cola is also considering the introduction of a root beer drink. The company feels that the probability that the product will be a success is .6. The payoff table is as follows: Success (s1) Failure (s2) Produce (d1) $250,000 -$300,000 Do Not Pr..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd