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My utility function is U(Income)=!/#. If I am healthy, I earn $25, which happens with 80% probability. If I am sick, I still earn $25
My utility function is U(Income)=!/#. If I am healthy, I earn $25, which happens with 80% probability. If I am sick, I still earn $25 but have to pay $9 in health care. You will need some of the information from the below table. a. (5 pts) What is my expected income without insurance? b. (5 pts) What is the utility of my expected income? c. (5 pts) What is my expected utility? d. (5 pts) What is my actuarially fair premium
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