4. (22 points) A) (16 points) Yield on Acre 2 Region IT Region I Yield insurance guarantee level for Acre 2 Region IIT Region VI Region IV Yield on s Acre 1 Yield insurance guarantee level for Acre 1 Wednesday, May 11, 2022 Enterprise insurance is a form of insurance whereby all growing activities for a given crop engaged in by a particular farmer are insured under one contract, rather than under separate contracts for each land unit. The figure at left depicts yield outcomes for two land units, Acre 1 and Acre 2, each assumed to be one acre. The yellow lines represent yield guarantee levels for Acre 1 (vertical line) and Acre 2 (horizontal line) when these units are insured separately, referred to as unit-level insurance. The purple downward sloping line represents total yield across both acres used to establish whether an insurance payment is to be made for the enterprise insurance contract. i) (9 points) Explain the insurance payment status with a 'Yes' or 'No' answer for each of the six regions (1.5 points each) Does Acre 1 receive indemnity payment? Region Does Acre 2 receive indemnity payment? Does The enterprise receive indemnity payment? Region I Region II Region IIT Region IV Region V Region VI Wednesday, May 11, 2022 ii) (7 points) Consider now Region II, Region III, Region, V and Region VI. Discuss how these regions can explain why Enterprise insurance can be viewed as a more effective means of providing insurance to farmers (4 points). and why the premiums should generally be lower for enterprise insurance than for unit level insurance (3 points). B) (6 points) Explain i) the distinction(s) between revenue insurance contracts and yield insurance contracts (3 points); ii) how gross margin insurance contracts work (3 points)