This topic contains a solution. Click here to go to the answer

Author Question: Ashton has the utility of wealth curve shown in the above figure. Ashton owns a sports car worth ... (Read 128 times)

jjjetplane

  • Hero Member
  • *****
  • Posts: 556
Ashton has the utility of wealth curve shown in the above figure. Ashton owns a sports car worth 30,000, and that is his only wealth. Ashton is a careless driver and there is a 30 percent chance that he will have an accident within a year.
 
  If he does have an accident, his car is worthless. Suppose all sports cars owners are like Ashton. An insurance company agrees to pay each person who has an accident the full value of their car. The company's operating expenses are 1,000. What is the minimum insurance premium that the company is willing to accept? A) 3,000 per year
  B) 6,000 per year
  C) 10,000 per year
  D) 15,000 per year

Question 2

Russia, Iran and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. Each of the countries can comply with the cartel agreement or to cheat on the cartel agreement.
 
  If all countries comply, the economic profit for each will be 140 million. If one country cheats, that country earns 200 million in economic profit and the other countries will have economic losses of 10 million. If all countries cheat, they break even. What are the strategies in this game? A) Comply with the cartel agreement or to cheat on the cartel agreement.
  B) Comply with the agreement and earn 140 million in profit.
  C) Cheat on the cartel agreement and earn -10 million in profits.
  D) Earn between 140 and 200 million in profits.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

chreslie

  • Sr. Member
  • ****
  • Posts: 307
Answer to Question 1

C

Answer to Question 2

A




jjjetplane

  • Member
  • Posts: 556
Reply 2 on: Jun 29, 2018
Gracias!


rachel

  • Member
  • Posts: 323
Reply 3 on: Yesterday
Great answer, keep it coming :)

 

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Medications that are definitely not safe to take when breastfeeding include radioactive drugs, antimetabolites, some cancer (chemotherapy) agents, bromocriptine, ergotamine, methotrexate, and cyclosporine.

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

Patients who cannot swallow may receive nutrition via a parenteral route—usually, a catheter is inserted through the chest into a large vein going into the heart.

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

For a complete list of videos, visit our video library