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4. (Maximum length one page.) Suppose that a new infectious disease begins spreading. Some people choose more or less exposure risk than others because of their level of risk aversion. Suppose that there are three groups of people in the population - one group has a high level of risk aversion, one group has a medium level, and one group has a low level (call this population with three groups, Population A). a) Discuss how a variety of levels of risk aversion affects the sorting of disease exposure. Give at least one example of this happening during the early years of Covid-19 that we discussed in class. b) Suppose that there is an alternative world composed of population B. In population B every individual has a level of risk aversion that matches the average risk aversion of population A. Should you be more worried about a large outbreak in population A or population B, why? c) Return to the world of population A. If you were to design a messaging campaign to warn people about this disease, would you design it to focus on specific groups of people or on the population overall? What are the benefits and risks of each approach? d) Is there a potential advantage to having the most risk averse people interact more frequently with the least risk averse people? Explain the benefits and risks of this that we discussed in class.

4. (Maximum length one page.) Suppose that a new infectious disease begins spreading. Some people choose more or less exposure risk than others because of their level of risk aversion. Suppose that there are three groups of people in the population - one group has a high level of risk aversion, one group has a medium level, and one group has a low level (call this population with three groups, Population A). a) Discuss how a variety of levels of risk aversion affects the sorting of disease exposure. Give at least one example of this happening during the early years of Covid-19 that we discussed in class. b) Suppose that there is an alternative world composed of population B. In population B every individual has a level of risk aversion that matches the average risk aversion of population A. Should you be more worried about a large outbreak in population A or population B, why? c) Return to the world of population A. If you were to design a messaging campaign to warn people about this disease, would you design it to focus on specific groups of people or on the population overall? What are the benefits and risks of each approach? d) Is there a potential advantage to having the most risk averse people interact more frequently with the least risk averse people? Explain the benefits and risks of this that we discussed in class.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter16: Information, Risk, And Insurance
Section: Chapter Questions
Problem 18RQ: What are some of the metrics economists use to measure health outcomes?
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4. (Maximum length one page.) Suppose that a new infectious disease begins spreading. Some people choose more or less exposure risk than others because of their level of risk aversion. Suppose that there are three groups of people in the population - one group has a high level of risk aversion, one group has a medium level, and one group has a low level (call this population with three groups, Population A). a) Discuss how a variety of levels of risk aversion affects the sorting of disease exposure. Give at least one example of this happening during the early years of Covid-19 that we discussed in class. b) Suppose that there is an alternative world composed of population B. In population B every individual has a level of risk aversion that matches the average risk aversion of population A. Should you be more worried about a large outbreak in population A or population B, why? c) Return to the world of population A. If you were to design a messaging campaign to warn people about this disease, would you design it to focus on specific groups of people or on the population overall? What are the benefits and risks of each approach? d) Is there a potential advantage to having the most risk averse people interact more frequently with the least risk averse people? Explain the benefits and risks of this that we discussed in class.
Transcribed Image Text:4. (Maximum length one page.) Suppose that a new infectious disease begins spreading. Some people choose more or less exposure risk than others because of their level of risk aversion. Suppose that there are three groups of people in the population - one group has a high level of risk aversion, one group has a medium level, and one group has a low level (call this population with three groups, Population A). a) Discuss how a variety of levels of risk aversion affects the sorting of disease exposure. Give at least one example of this happening during the early years of Covid-19 that we discussed in class. b) Suppose that there is an alternative world composed of population B. In population B every individual has a level of risk aversion that matches the average risk aversion of population A. Should you be more worried about a large outbreak in population A or population B, why? c) Return to the world of population A. If you were to design a messaging campaign to warn people about this disease, would you design it to focus on specific groups of people or on the population overall? What are the benefits and risks of each approach? d) Is there a potential advantage to having the most risk averse people interact more frequently with the least risk averse people? Explain the benefits and risks of this that we discussed in class.
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