Jon is risk averse. When he buys insurance against all risks, then
A) he knows his wealth with certainty.
B) his utility exceeds his expected utility.
C) his wealth exceeds his expected wealth.
D) all of the above.
Question 2
The United States uses a single payer model of healthcare in which the government pays for all healthcare. Because a single payer model of health care creates no deadweight loss, most economists agree that the U.S. system of health care is efficient.
A) Both sentences are false.
B) The first sentence is false; the second sentence is correct.
C) The first sentence is correct; the second sentence is false.
D) Both sentences are correct.
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