John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000, and there is a 25 percent chance that he could lose it all. If an insurance company offers to insure against this loss for $6,000, John will
A) buy the policy.
B) not buy the policy.
C) be indifferent between being insured and uninsured.
D) There is not enough information to answer.
A
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If the interest rate is 10 percent and a business pays $100,000 for a lease on a factory, the explicit costs are
A) $110,000. B) $10,000. C) $100,000. D) $90,000.
The only reason paper currency (e.g., the dollar bill) is accepted as money in the United States today is because it is backed by gold
Indicate whether the statement is true or false
As the environmental regulations increase, the _____________ decrease and ____________ must be used.
a. interest and willingness/punitive measures b. low-cost methods/more costly methods c. marginal benefits/marginal costs d. internalities/externalities
It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?
a. This loss of jobs has been detrimental to our economy. b. The government should provide subsidies to encourage more people to become farmers. c. The reduction in the number of farmers explains the increase in the price of food. d. This is progress because freed-up labor is used to produce other goods.