Faye runs a for-profit counseling center. She estimates that the price elasticity of demand for her product is 2.0 (in absolute value) . If the government provided a subsidy to counseling services (for each person counseled, the government sends a check to the counseling service) [hint: draw a supply curve and then a couple of demand curves], then, relatively speaking: a) She would expect a large decrease in price and a small increase in quantity. b) She would expect a large decrease in both price and quantity. c) She would expect a small decrease in price and a large increase in quantity. d) She would expect a small decrease in both price and quantity. Fernanda and Tigstu have the following total utility from different levels of income. Assume each currently has $20,000. Income TU ( Fernanda) TU (Tigstu) $10, 000 30 30 $15, 000 45 4 4 $20, 000 60 57 $25, 000 75 69 $30, 000 90 80 Fernanda is risk- Tigstu is risk- If offered actuarially unfair insurance, Fernanda buy it; Tigstu (might / will / will not) buy it. If Fernanda faces a loss of $10, 000 with 25: probability (Loss A) or a loss of $5, 000 with 50% probability (Loss B) : Risk premium (Loss A) Risk premium (Loss B) . > I