Question
Assume you have a home worth 50,000 with a 10% chance of 15,000 worth of damage occurring. Let U(W)=W^8 a. what is expected utility (eu)
Assume you have a home worth 50,000 with a 10% chance of 15,000 worth of damage occurring. Let U(W)=W^8
a. what is expected utility (eu) without insurance?
b. if the insurance company charges a premium of v=0.10 per dollar of insurance coverage, what is EU with full insurance? Does this person choose to buy full insurance?
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Agricultural Economics
Authors: Evan Drummond, John Goodwin
3rd edition
136071929, 978-0136071921
