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D Question 13 20 pts Instructions: Write your answers In the space provided, Tin Suppose your utility function is U - In(4x0), where I is
D Question 13 20 pts Instructions: Write your answers In the space provided, Tin Suppose your utility function is U - In(4x0), where I is the amount of income you make in a given year. Suppose that you typically make $50,000 Ade per year. but there is a 10 percent chance that, in the next year, you will get sick and lose $25,000 in income due to medical costs 261 Al If you do not have health insurance, your expected utility is Round to 4 decimal places Now suppose you can buy Insurance that will cover your loss if you get sick. B) The actuarially fair premium $ Round to 2 decimal places if necessary C if you buy the insurance plan at the actuarially fair premium, your expected utility is Round to 4 decimal places DI The maximum (premiuml you would be willing to pay for this insurance policy $ Round to 2 decimal places if necessary E 1 Your roll premium is $ Round to 2 decimal places if necessary
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