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Use the rothschild/stilgitz insurance model to determine if moral hazard affects the desirability of complete insurance. Specifically suppose that as the level of insurance coverage
Use the rothschild/stilgitz insurance model to determine if moral hazard affects the desirability of complete insurance. Specifically suppose that as the level of insurance coverage increases, the risk of illness increases
A) Draw a breakeven live for insurers under moral hazard
B) which plan will this individual prefer, when offered plans along the new breakeven line? Please show it graphically. Is this optimal plan a full insurance plan
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