Beachcomber Beatrice spent her entire wealth of $100,000 to build a beach house on the Gulf of Mexico. There is a 10 percent chance that the house will be destroyed by a hurricane. Beatrice's utility of wealth schedule is given in the table above
What is the maximum amount that Beatrice would be willing to pay for an insurance policy that pays $100,000 if her beach house is destroyed by a hurricane? A) $10,000
B) $30,000
C) $40,000
D) $60,000
C
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Potential GDP is reached when
A) unemployment is zero. B) there is no cyclical unemployment. C) unemployment is above full employment. D) unemployment is below full employment. E) the natural unemployment rate equals zero.
Goods and services are exchanged in
a. product markets b. resource markets c. inventory markets d. classified markets e. government markets
A market in which adverse selection occurs is often called a lemons market
a. True b. False Indicate whether the statement is true or false
If the firms in a competitive price-searcher market are suffering short-run losses, which of the following will occur in the long run?
a. New firms will enter the industry. b. Customers of firms that leave the industry will switch to remaining firms. c. Firms that remain in the industry will face reduced demand. d. Firms will continue to incur losses.