Insurance company is able to offer him fair insurance

Assignment Help Business Economics

Reference no: EM131093135

Shaq is a basketball player. He’s worried about receiving an injury that will mean an entire season off basketball. Currently, he is paid $120,000 per year to play basketball. If he is injured, his salary is reduced to $50,000 per year. The probability of sustaining an injury bad enough to necessitate him having a season off is 45%.

(a) Will Shaq buy insurance if an insurance company is able to offer him fair insurance? How much is his premium?

Reference no: EM131093135

Questions Cloud

Assume that national restaurant firm : Assume that a national restaurant firm called BBQ builds 15 new restaurants at a cost of $1 million per restaurant. It outfits each restaurant with an additional $300,000 of equipment and furnishings. To help partially defray the cost of this expansi..

Write paper that outlines the element of the current program : Search for proposal(s) by your state governor to deal with a health care access problem and write a paper of 1,250-1,500 words that outlines the elements of the current program and the governor's proposals for improved access.

Workshop dealing with landlord-tenant issues : When and Where is the next Riverside County Superior Court workshop dealing with Landlord-Tenant issues? What are the costs for these workshops? Besides going to court, are there other avenues for Landlords and Tenants to work out their issues? If so..

System of fixed exchange rates and high capital mobility : Under a system of fixed exchange rates and high capital mobility, is monetary policy or fiscal policy better suited to promoting internal balance? Why? Under a system of floating exchange rates and high capital mobility, is monetary policy or fiscal ..

Insurance company is able to offer him fair insurance : Shaq is a basketball player. He’s worried about receiving an injury that will mean an entire season off basketball. Currently, he is paid $120,000 per year to play basketball. If he is injured, his salary is reduced to $50,000 per year. Will Shaq buy..

Write utility function for alice for sugar and caste sugar : Alice runs a cupcake business. She uses lots of caster sugar in her baking (a very fine sugar). Alice also owns a thermomix, thus regular white sugar is a perfect substitute for caster sugar. However, regular sugar comes in 2kg bags, while caster sug..

Calculating the utility derived from each bet : Rosco has a utility function over money = log(I) where log is base 10 and I is money. His initial income (I) is $1000. Suppose he must accept one of three bets: Graph each of these of a utility-of-income graph with income on the horizontal and utilit..

What is the minimum cost of producing : Suppose that the price per unit of input A is 8 euros and the price per unit of input B is 5 euros. What is the minimum cost of producing 100 units of output Y for the firm if the firm’s production function is Y = 4A + B/5

Find the p-value for the randomization test : Find the p-value for the randomization test of the null hypothesis that the drug has no effect versus a one-sided alternative (the drug improves fertility).

User Account

All Pages