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

What is gross domestic product per capita, Q. What is Gross Domestic Produc...

Q. What is Gross Domestic Product Per Capita? Gross Domestic Product, Per Capita: Level of GDP divided by the population of a region or country. Changes in real GDP per capita

Examples of oligopolies abound, The U.S. automobile industry, the soft-drin...

The U.S. automobile industry, the soft-drink industry, the brewing industry, segments of the fast-food industry, and airplane manufacturers. Oligopoly will usually produce less tha

Mathematical derivation of ordinary demand function, Mathematical Derivatio...

Mathematical Derivation of ordinary demand function: Here we present the mathematical and more general proof of the above result. Consider, again, the initial price income sit

Political economy, #question.Now suppose nation A has RA resources in its t...

#question.Now suppose nation A has RA resources in its treasury and nation B has RB resources. The winning coalition in each nation is WA and WB respectively. Leaders want to survi

Define Co-ordination Number, What is Co-ordination Number? A Co-ordinatio...

What is Co-ordination Number? A Co-ordination Number is the total number of ligands which are attached to the central metal atom by co-ordinate bonds or number of atoms of a liga

Microeconomics, explain the difference between traditional theory and moder...

explain the difference between traditional theory and modern theory of cost

What is international monetary fund, Q. What is International Monetary Fund...

Q. What is International Monetary Fund? International Monetary Fund: An international financial institution established after World War II with the goal of stabilizing and regu

Fiscal imbalance, Fiscal Imbalance: The persistent rise in resource ga...

Fiscal Imbalance: The persistent rise in resource gap has led to a growing volume of public debt. The central feature that emerges is a serious fiscal imbalance, arising from

#ttitl derivation of demand funcation, derivation of demand funcation usin...

derivation of demand funcation using indifferance curv ordelreay and competed demand curv

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