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Question 2; Suppose that Person B wants to purchase full insurance and enter the same risk pool a Person A Since they would be in

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Question 2; Suppose that Person B wants to purchase full insurance and enter the same risk pool a Person A Since they would be in the same risk pool, the insurer would charge Person A and Person B the sam premium. Suppose Person A has a Pmax for full insurance equal to $16 and Person B has a Pmax for full insurance equal to $26. a. What premium would be required to charge each of Person A and Person B if the insurer wanted to break-even? [2 points] b. Will Person A purchase full insurance for the break-even premium? Why or why not? [2 points] c. Will Person B purchase full insurance for the break-even premium? Why or why not? [2 points] d. Comment on the viability of the risk pool under this circumstance. In other words, woul the risk pool continue to work? [2 points]Person A faces an 80% chance of having no loss and a 20% chance of having a loss of $50. Person B faces an 80% chance of having no loss and a 20% chance of having a loss of $100. d

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