What is the break-even price for the insurance company

Assignment Help Econometrics

Reference no: EM131145284

Crop Insurance. Consider a state in which farmers are divided equally into two types: high risk and low risk. The average annual crop loss (and possible insurance claim) is $200 for a low-risk farmer and $1,200 for a high-risk farmer. (Related to Application 5 on page 631.)

a. If all farmers were to buy insurance, what is the break-even price for the insurance company?

b. Suppose a farmer will purchase insurance only if the price (the annual premium) is no more than 50 percent higher than his or her average crop loss. What is the equilibrium price?

Reference no: EM131145284

Questions Cloud

How many nanoseconds will it take : How many nanoseconds will it take to complete 120.0 instructions with pipelining? Round your answer to the nearest integer

Describe how the manufacturer utilize the marketing channels : Examine one of your favorite products, and describe how the manufacturer utilizes the marketing channels to get the product to you, the end user.

Describe various form of elder abuse : Describe various form of elder abuse, how to recognize it and reporting requirements. Discuss the importance of reporting births and deaths.

What is the probability of completing the project in no more : The time required to complete a certain type of construction project follows a normal distribution with a mean of 60 weeks and a standard deviation of 4 weeks. What is the probability of completing the project in no more than 60 weeks?

What is the break-even price for the insurance company : If all farmers were to buy insurance, what is the break-even price for the insurance company?

Pay as factor in making job decisions : As a supervisor, if you asked or surveyed your employees about the importance of pay as a factor in making job decisions, do you think employees would over-state or understate its value to them?

Discuss the economic costs impacted by patriot act : Discuss the economic and constitutional costs impacted by this Act. Explain if security has increased since the enactment of the Patriot Act and if so, has that increased security been worth the cost? Provide examples to support your claims.

Job requirements job analysis : Write the answers of the question given below related to the topic "Job Requirements Job Analysis" Which of the following is not a good reason for using an outside consultant for job analysis?

Training session on how to avoid appraisal rating errors : As a manager you realize the supervisors who report to you make errors when they rate their employees (e.g., too lenient, rate everyone the same, etc.). You notice a consultant is offering a training session on how to avoid appraisal rating errors. H..

User Account

All Pages