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!
Problem: A competitive insurance industry sells insurance to two kinds of individu- als: good and bad risks. Assume that there are 1,000 individuals of each kind. A good risk individual is willing to pay MBG = 20 for coverage, and the marginal cost of serving this individual is MCG = 10. Regarding bad risks, we have that MBB = 50 and MCB = 40.
Required:
Question 1: Assuming that insurance companies can distinguish among good and bad risks, and that they can charge di§erent premium to each kind of individual, what prices will they charge and who would buy insurance?
Question 2: Assuming now that insurance companies cannot distinguish among good and bad risks, so they are forced to charge the same premium to everybody, determine the market price and the quantity of insurance sold? Who buys?
Question 3: Answer parts (a) and (b) for the case in which MBB = 30 while everything else is as above.
Question 4: Explain the economic intuition behind the above results.
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..
Explain each of the following using supply and demand diagrams, With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.
The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.
Draw the production possibility curve and a. Define consumer surplus and producer surplus.
The Australian government administers two programs that affect the market for cigarettes
How many tickets to sell to maximize total welfare.
The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled
Depict the von Neumann-Morgenstern utility index u in a diagram
What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution
Calculate gross national product and net national product
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