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Calculation of Expected Utility from Health Insurance
(a) What is your expected utility without insurance? (b) Suppose you can buy insurance that will cover the medical expenses but not the foregone part of your salary. How much is an actuarially fair policy, and what is your expected utility if you buy it?$5.99
Calculation of Health Expenditure on Insurance
(a) Jermaine has a health insurance policy that has a deductible of $1,000, a $10 copayment on doctor visits, and coinsurance of 10% on all expenses other than those for which there are copayments. If Jermaine went to the doctor 4 times (doctor's fee is $40 per visit) and had a surgery that cost $2,000, how much of these expenses did Jermaine pay directly?$5.99
Calculation of Resulting Income from Full Insurance
(a) If you buy full insurance (b = D) at an actuarially fair premium (AFP), what would be your resulting income if you're injured? (b) If you are not injured? (c) If you buy partial insurance, can your resulting income ever be more when you’re injured than when you’re not injured?$5.99
Find the Probability for Uniform Distribution
A manager of a large department store with three floors reports that the time a customer on the second floor must wait for an elevator has a uniform distribution ranging from 0 to 16 minutes. It takes the elevator 1 minute to go from floor to floor, find the probability that a hurried customer can reach the first floor in less than 5 minutes after pushing the second-floor elevator button.$5.99
Calculation of Sales Volume to Achieve Targeted Profit
Given: Selling price per unit, $40; total fixed expenses, $80,000; variable expenses per unit, $30. Assume that variable expenses are reduced by 20% per unit, and the total fixed expenses are increased by 10%. Find the sales in units to achieve a profit of $20,000, assuming no change in selling price.