e. (3 pts) Would Colin buy the health insurance policy described in part d? Explain in words why/why not. f. (5 pts) Suppose Big Blue insurance offers a second insurance product with a premium of $200. The policy insures only half of the $2,000 in medical costs, should the medical event occur. Provide an economic rationale for why Big Blue or other insurer would offer such a partial coverage policy rather than full coverage. g. (3 pts) If Big Blue offered two policies - the one specified in part d and the one in part f - which would Colin choose? Explain in words and support your answer with numerical evidence.h. (4 pts) Based on your analysis above, sketch out Colin's utility (y-axis) as a function of income (x-axis) under the following scenarios. i. No insurance ii. Actuarially fair full insurance iii. Insurance policy specified in part div. Insurance policy specified in part f i (3 pts) Suppose Clara is younger and healthier than Colin. Provide your assessment as to whether Clara would make the same/different choices as Colin regarding the purchase of the various insurance policies in part h. Be sure to state any assumptions you make.a. {3 pts} Calculate Colin's expected income, HY], in the absence of any health insurance. b. {3 pts} Calculate Colin's expected utility, E{U], in the absence of any health insurance. c. {3 pts} Explain in words what the actuarially fair premium for fully insuring against this medical event is and calculate the dollar amount. cl. {3 pts} Suppose Big Blue insurance offers an insurance policy with a premium of $430. The policy fully insures against the $2,000 in medical costs, should the medical event occur. From Big Blue's perspective, explain in words what the loading fee is and calculate the dollar amount of the loading fee. Answer each part of all three questions below. 1. [30 pts total] lColin is currently unemployed and without health insurance coverage. He derives utility {U} from annual interest income on his savings [Y] according to the following function: U=lYlv2 Colin presently makes $5,000 of interest income per year. He also knows that there is a 20 percent probability that he will suffer an adverse medical event. The cost of treatment for the medical event, should it occur, will be about $2,000