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Business, 08.12.2020 16:50 alopez117

Suppose you face a choice between a certain income of $2,000, or a 50-50 chance of income of $1,000 or $3,000. Suppose you prefer the certain $2,000. You are risk averse. a. True
b. False

Suppose that a disease affects 5% of the population and that everyone is equally likely to get the disease. Treatment for this disease costs $38,000. Assume that this disease, and necessary treatment, represent the only healthcare costs in this population. The expected cost of healthcare is $. If people to pay the expected cost of healthcare with certainty, rather than take on the 5% risk of having to pay the full cost of the treatment, they are risk averse.

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