The answer is only asking for theoretical and not numerical answers

2. Manny, Moe and Jack are the only 3 employees of the Pep Boys auto parts store. They can each buy their insurance through the firm if they want to, but each will have their wages reduced by the full premium if they choose to participate in the plan. Their personal actuarially fair premiums (AFPs) are listed below, along with the average AFPs depending on how many of them choose to participate in the insurance plan. Assume no moral hazard. AFP Manny Moe Jack $120 $100 $50 Average AFP $90 If all 3 buy Average AFP $110 If 2 buy Average AFP $120 If only 1 buys The insurance company observes the number of employees that buy the policy and knows the relationship between the number of buyers and the average AFP. However, the insurer cannot observe each worker's individual AFP unless it performs a medical exam on each worker. If the insurer does not perform the medical exams, assume it charges each worker a premium equal to the average AFP given the total number of workers who buy insurance. If the insurer does perform the medical exams, assume it charges each employee a premium equal to their individual AFP. a) Suppose medical exams are not conducted. What factors will determine whether or not Jack will buy insurance (assume Jack knows that if he buys the policy, Manny and Moe will buy the policy)? b) What determines whether or not Moe would like the insurance company to conduct the medical exams