kindly provide answers in detail for question 2a or 2b. ALL INFORMATION IS PROVIDED. thank you

Question 2a (Topic: Uncertainty and Asymmetric Information)

Using appropriate models, analyse market outcomes for comprehensive car insurance in the following way:

(a) Analyse how a risk-averse individual makes decisions facing uncertainty. (10 Marks)

(b) Analyse the best pricing strategies for insurance firms, assuming that there are individuals with different levels of risk aversion and that the firms in this market collude in their pricing strategies. (5 Marks)

(c) Discuss how the outcomes in (b) would differ if you assumed perfect competition. (5 Marks)

(d) Discuss the outcomes when the suppliers lack information about the level of risk facing each potential insuree. Carefully explain why some potentially beneficial economic transactions can "go missing" in the presence of this information asymmetry. (10 Marks)

Question 2b (Topic: Welfare Analysis)

Proceed as follows:

(a) With a welfare maximisation model and an Edgeworth box, explain the following statement on Pareto efficiency (10 Marks):

"An economy can be optimal in this sense even when some people are rolling in luxury and others are near starvation as long as the starvers cannot be made better off without cutting into the pleasures of the rich. . . . In short, a society or an economy can be Pareto-optimal and still be perfectly disgusting."

Sen (1970), Nobel laureate in economics.

Reference: Sen, Amartya, 1970. Collective Choice and Social Welfare, San Francisco:Holden-Day.

(b) Using different welfare functions, explain why an allocation of resources that is welfare-maximising for a society may not be welfare-maximising for another society. Also, explain how Gini index coefficients can be used as a proxy for society's preferences. (10 Marks)

(c) Conclude your previous discussions with some analysis of income-redistribution policies. Is there any economic theoretical justification for such policies? (10 Marks)