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Suppose someone knew the probability of incurring a $10,000 medical expense was 5%, and the odds of being healthy and incurring no expenses was 95%.
Suppose someone knew the probability of incurring a $10,000 medical expense was 5%, and the odds of being healthy and incurring no expenses was 95%. If they used that information to compare the expected cost to them ($500) with the $400 premium it would cost to get full coverage and decided not to buy the insurance, then economists would say they are
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