Indicate whether the statement is true or false, and justify your answer.Suppose that a long-time nicotine addict who is trying to quite smoking decides he wants a cigarette, but his friends successfully restrain him. The friends’ intervention has an ambiguous effect on the addict’s welfare.
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Indicate whether the statement is true or false, and justify your answer.
Suppose that a long-time nicotine addict who is trying to quite smoking decides he wants a cigarette, but his friends successfully restrain him. The friends’ intervention has an ambiguous effect on the addict’s welfare.
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- A claims representative suspects that an insured has committed fraud in submitting a claim for stolen property by including items that were not stolen. The claims representative believes that the insurer can deny the claim because of the fraud but does not have sufficient evidence to meet the legal standards to prove fraud. The claims representative considers offering less that a fair amount to settle the claim in hopes that the insured will accept the settlement. This course of action would reduce the insurer’s loss from a fraudulent claim, close the claim, and avoid costs associated with trying to prove fraud. However, despite the claims representative’s suspicions, the insured not may not be guilty of fraud and may be entitled to the full amount of the claim. There are several factors to consider with his scenario. Considering the two primary goals of the claims function, which are keeping the insurer’s promise and supporting the insurer’s profit goal, how would they apply…Indicate whether the statement is true or false, and justify your answer.Loss aversion is the economics of jealousy: people value what they do not have more than what they do have.Can you please elaborate on what incoterms are and why they're important
- Could you please write your own words, not copy-paste or plagiarism issues Question: Discuss the concept of an “overconfidence bias” and why this bias can be seen as being a “double edged sword” in the context of behavioral economicsIndicate whether each of the following examples of behavior is consistent with the way the traditional economic framework suggests people should act, or whether it is reserved for behavioral economists to examine. Consistent with the Predictions of Traditional Reserved for Behavioral Economics Example Economic Models Some people treat $80 they earn differently from $80 they receive as a gift. Some people would be willing to pay money to lower the incomes of others. Some people sacrifice disposable income to help their children pay for college. Some people choose to work fewer hours after receiving a raise at work.Could you please write your own words, not copy-paste or plagiarism issues Question: Discuss and provide examples of why context and identity are important determinants in affecting decision making processes in the context of behavioral economics
- Gives explanation correctlySuppose that there are 2 types of plans available to you. Plan A has a deductible of $500, with 10 percent co-insurance rate for many health care services. Plan B has a deductible fo $1000, with 35 percent co-insurance rate. Plan A costs $200 per month in premiums while Plan B costs $80. Discuss characteristics of people who would choose Plan A versus Plan B. Assuming that both plan types exist in the market, who would likely choose Plan B over Plan A? What plan would you choose?Indicate whether each of the following examples of behavior is consistent with the utility-maximization framework of traditional economics or is better explained by concepts developed by behavioral economists. Example Consistent with the Predictions of Traditional Economic Theory More Effectively Addressed by Behavioral Economics There are people who pursue a degree in theater rather than engineering, even though engineering careers are usually much higher-paying. Some people treat $55 they earn differently from $55 they win in a random drawing. Some people would pay money to lower the incomes of others. People at all-you-can-eat restaurants eventually leave, even though they could continue eating for free.
- Assume a consumer's demand for a medical service is as follows: Q = 100 - Pp where Pp is the out-of-pocket price she actually faces. She is considering four different insurance options: uninsurance, full insurance, a 50% coinsurance plan, and a copayment plan with a $25 copay. Assume this service has a list price of PL = $70. Calculate Q under each insurance plan. Please fill in the final answer without showing the middle steps (a number only, without any extra space, symbol, word, etc.) If the customer is uninsured, Q= • If the customer is fully insured, Q= • If the customer has a 50% coinsurance plan, Q= • If the customer has the copayment plan, Q=The doctor must decide which medication to prescribe to the patient. Possible states are s∈[0,1]. She has three medications available: A, B, and C. The effect of medication A is described by the blue function, the effect of medication B by the red function, and the effect of medication C by the black function. For which medication will the doctor decide if she decides based on the maximax criterion and Wald's maximin criterion? The blue function is defined as fA(s)=1/5(cos(4s)+2), the red function is fB(s)=2/5(sin(4s)+1), and the black function is fC(s)=1/2. For which medication will the doctor decide if she decides based on Laplace's criterion?For questions 8-10 assume that Rosa has a 10% chance of getting sick in the next year. If she gets sick, her medical bills will amount to $3600. She has a wealth of $10,000. Suppose she has the utility function u(x) = Vx, where x is her net wealth at the end of the year. What is Rosa's risk premium? (Answer should be a dollar sign followed right after by a whole number, i.e. $24) Enter your answer here
