It has been estimated that the herd immunity threshold for the H1N1 flu of 2009 was 25%but that for the H1N1 flu of 1918 it was 74%. In most years, the herd immunity thresholdfor the flu is around 50%. The herd immunity threshold is a function of thecontagiousness of the flu strain and the effectiveness of the flu shot. There was no flushot in 1918, the herd immunity in 1918 came from people having had the flu andsubsequently having immunity. c. What subsidy per vaccine would be necessary in order for Q* percent of thepopulation to choose to be fully vaccinated? (Assume that individuals willrespond to monetary incentives - as we discussed in class, vaccines may be a casewhere people will not respond to monetary incentives.) Explain in words andgraphically.

The Demand CurveThe demand curve represents the quantity of vaccines that individuals are willing to…

Answered: It has been estimated that the herd…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7) There is some popular unrest in a dictatorship. The population might be in a revolutionary mood, in which case they would be willing to violently overthrow the dictator, or just grumbling, in which case they would not. There is a 30% chance the population is in a revolutionary mood. The population knows their own type, but the dictator does not. After nature chooses whether the population is in a revolutionary mood, the population can decide to protest or not. The dictator observes the populations behavior, and then can peacefully resign or hold onto power. The dictator can make this choice whether or not the population protests. If the dictator holds onto power, the population can violently overthrow the dictator or not. The dictator gets 50 utility for retaining power, O utility if they peacefully resign, and -100 utility if they are overthrown. The revolutionary population gets 50 utility for the dictator resigning, 30 utility for overthrowing the dictator, and -50 utility for…
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Suppose that I am willing to pay $400 for anti-lock brakes that reduce my chance of dying in a car accident from 9 in 10,000 (0.0009) to 5 in 10,000, (0.0005). Based on this choice, what would be an estimate of the minimum value that I place on a statistical life? Show your work
Suppose that every driver faces a 2% probability of an automobile accident every year. An accident will, on average, cost each driver $14,000. Suppose there are two types of individuals: those with $112,000.00 in the bank and those with $3,500.00 in the bank. Assume that individuals with $3,500.00 in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is . Assume that the price of insurance is set at the actuarially fair price. At this price, drivers with $112,000.00 in the bank likely buy insurance, and those with $3,500.00 in the bank likely buy insurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.) Suppose a state law has been passed…
High deductible plans in the U.S. reduce adverse selection. True False
Suppose that every driver faces a 2% probability of an automobile accident every year. An accident will, on average, cost each driver $7,000. Suppose there are two types of individuals: those with $42,000.00 in the bank and those with $1,750.00 in the bank. Assume that individuals with $1,750.00 in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is $ Assume that the price of insurance is set at the actuarially fair price. At this price, drivers with $42,000.00 in the bank likely v buy insurance, and those with $1,750.00 in the bank likely buy insurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.) Suppose a state law has been passed forcing all individuals to…
Effect of the COVID 19 pandemic on the hospitality, industry, not just for hotel and resorts
There are two types of drivers, safe types who have an annual probability of getting in an accident of 10% and risky types who get in a car crash with probability 20%. Each type represents half of the population. When a car crash occurs, it costs the insurance company $10,000. This problem is about asymmetric information, specifically in insurance markets. To answer this question, it helps to understand insurance. Insurance contracts work in the following way. The amount that the insurer pays in the event of an accident is Payout = (Accident cost - Deductible) *Coinsurance rate. The rest is paid by the individual. The expected value of a firm's expenses are E[Payout] = (probability of an accident)*Payout. The insurance premium is the price the consumer pays for insurance. It is paid regardless of whether there is an accident. Therefore, the insurer's expected profit = Premium - E[Payout]. a. Suppose the insurer offered only one type of contract: deductible=0 and coinsurance rate= 100%.…
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Peoples' behavior in behavioral economic games like the Dictator Game generally show that Many people seem to prefer outcomes that benefit others Under conditions of anonymity, most people are completely selfish. People are not generous unless they are in situations in which their partners will be able to reciprocate. There is very little variation in peoples' responses across cultures.
Half of the used cars for sale in a market are good and the other half are lemons. Owners of good cars are willing to sell them for $1,200, while owners of lemons are willing to sell them for $50. There are many potential buyers who are willing to pay $1,500 for a good car and $300 for a lemon. Buyers cannot tell good cars from lemons, but the original owners know whether a car is a lemon or not. There will be an equilibrium in which all used cars sell for $1,150. There will be an equilibrium in which lemons sell for $50 and good used cars sell for $1,200. There will be an equilibrium in which all used cars sell for $800. The only equilibrium is one in which only lemons are sold. There will be an equilibrium in which lemons sell for $300 and good used cars sell for $1,500.

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