Suppose a comprehensive plan applies to 2,000 low-risk people and 1,000 high-risk people opting for insurance coverage. If the average claim submitted by low-risk people is $200 while that submitted by high-risk people is $2,000 . what would be the net benefit accrued by a high-risk person paying the break even premium charged by the insurance company?
a. -$300
b. $1,800
c. $1,200
d. -$400
C
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The term oligopoly is highly ambiguous in the absence of
A) a clear and defensible definition of the product. B) a clear price structure. C) a definition of marginal cost. D) accounting rules adequately defining net revenue. E) clear distinctions between competitive and noncompetitive industries.
Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee falls from $6 to $4, the market quantity demanded would
A) decrease by 89 lbs. B) increase by 110 lbs. C) increase by 61 lbs. D) increase by 26 lbs.
Bambi sells apples that she produces up to the equilibrium price of $20 per bushel. Andre sells green beans that he produces up to the equilibrium price of $18 per bushel. If they both sell the same number of bushels, but Andre makes more profit than Bambi, which of the following situations is true?
a. Producer surplus is greater for green beans than apples. b. Producer surplus is less for green beans than apples. c. Producer surplus is the same for green beans and apples. d. Producer surplus is negative for both green beans and apples.
An economy that trades with the rest of the world is a(n) ________.
A. closed economy B. command economy C. open economy D. trade economy