can you help me with this question?i really need help,if u can help me,i will be very very appreciate!! 3) Suppose you own a car worth $35,000. While you have accident insurance your policy does notcover insurance against theft. The insurance company quotes a price of an additional $140 a yearto fully insure your car against theft.a.Suppose you are a risk-neutral expected payoff maximiser who has a good estimate of theprobability (p = [0,1]) that your car might be stolen next year. At what probability p wouldyou be indifferent between insuring and not insuring your car against theft for a premium of$140 a year?b. How would your answer to part a) change if your preferences were characterised byCumulative Prospect Theory rather than Expected Utility Theory?c. The insurance company also offers partial insurance that pays you 90% of the value of yourcar (i.e. $31,500) in case of theft and this policy only costs $70 a year. What might be thereason for partial insurance to be much cheaper than full insurance?

*a If you are a risk-neutral expected payoff maximizer, you would be indifferent between insuring…

theft. The insurance company quotes a price of an additional $14 gainst theft. e a risk-neutral expected payoff maximiser who has a good estima 0,1]) that your car might be stolen next year. At what probability p between insuring and not insuring your car against theft for a pre answer to part a) change if your preferences were characterised b pect Theory rather than Expected Utility Theory? mpany also offers partial insurance that pays you 90% of the valu in case of theft and this policy only costs $70 a year. What might insurance to be much cheaper than full insurance?

theft. The insurance company quotes a price of an additional $14 gainst theft. e a risk-neutral expected payoff maximiser who has a good estima 0,1]) that your car might be stolen next year. At what probability p between insuring and not insuring your car against theft for a pre answer to part a) change if your preferences were characterised b pect Theory rather than Expected Utility Theory? mpany also offers partial insurance that pays you 90% of the valu in case of theft and this policy only costs $70 a year. What might insurance to be much cheaper than full insurance?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Total Total Total Product Fixed Variable (Blankets) Cost Cost 0 A 0 1 60 25 2 60 40 3 60 I 4 60 55 5 60 55 6 60 70 7 60 100 8 60 145 A What is the numerical value of B? A/ What is the numerical value of C? A/ Total Cost What is the numerical value of D? B 85 100 110 G 115 130 160 205 Average Average Average Variable Total Fixed Cost Cost cost - с 60 30 20 15 12 8.6 7.5 25 20 16.7 13.8 Ꭰ 11.7 14.3 18.1 E The table describes the short-run daily costs of the Baby Blanket Company. What is the numerical value of A? 85 36.7 28.8 J 21.7 22.9 25.6 Marginal Cost F H 15 10 0 15 30 45
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