Once you reach the age of 65, which of the following social insurance programs w

Question

Once you reach the age of 65, which of the following social insurance programs would insure you against health expenditures?

Select one:

a. Disability insurance

b. Social Security

c. Workers' compensation

d. Medicare

e. Unemployment insurance

A wealthy couple protects itself against the risk of a car accident by saving extra money. This is an example of:

Select one:

a. adverse selection.

b. rent seeking.

c. moral hazard.

d. X-inefficiency.

e. self-insurance.

You make $40,000 and ride your bicycle to work. You estimate that there's a 1% chance of having your leg broken in the next year and a 99% chance that you won't be hurt at all. Medical bills for a broken leg will be $4,000. Assume that your utility depends on the square root of your consumption in either possible outcome. If you don?t buy insurance, your expected utility will be:

Select one:

a. 225

b. 200

c. 199.9

d. 198.0

e. 189.7

If you injured at work, under which of the following social insurance programs would you be covered?

Select one:

a. Disability insurance

b. Social Security

c. Workers' compensation

d. Medicare

e. Unemployment insurance

Which of the following terms refers to the additional amount that a risk adverse person will pay above and beyond the actuarially fair price?

Select one:

a. Actuarial adjustment

b. Risk premium

c. Adverse selection adjustment

d. Experience rating

e. Risk adjustment

Suppose you view one of two possibilities for your future when you jump out of a perfectly good airplane: either your parachute opens or it doesn't. These two events are:

Select one:

a. moral hazards.

b. self-insurance.

c. consumption.

d. states of the world.

e. adverse selections.

Information asymmetry sometimes leads to insurance market failure and sometimes does not. Which of the following equilibriums will NOT result in market failure?

Select one:

a. Separating equilibrium

b. Pooling equilibrium

c. Experience rating equilibrium

d. Both A and B

e. None of the above

You make $40,000 and ride your bicycle to work. You estimate that there's a 1% chance of having your leg broken in the next year and a 99% chance that you won't be hurt at all. Medical bills for a broken leg will be $4,000. Assume that your utility depends only on your consumption in either possible outcome. Suppose you buy full insurance. What would be the actuarially fair premium for the insurance?

Select one:

a. $10

b. $40

c. $50

d. $100

e. $200

You make $40,000 and ride your bicycle to work. You estimate that there's a 1% chance of having your leg broken in the next year and a 99% chance that you won't be hurt at all. Medical bills for a broken leg will be $4,000. Assume that your utility depends on the square root of your consumption in either possible outcome. If you do buy insurance, at the actuarially fair price, your expected utility will be:

Select one:

a. 200.1

b. 200.0

c. 199.9

d. 198.0

e. 189.7

Explanation / Answer

Ans 1)

The legel US residents who ager above 65 years are eligible for social security program called as Medicare which covers all medical expenses.

Hence option D is correct response

Ans 2)

Self Insurance is an phenomenon by which individual saves for the future losses hence option D is correct inn this context

Ans 3)

0.99sqrt(40000)+0.01sqrt(36000)=199.98

Hence option C is correct

Ans 4)

Workers compensation coverage is a insurance program that covers lost wages and medical treatment resulting from an employee's work-related injury

Option C is correct response

Ans 5)

Risk Premium it is

Option B is correct response and it is Risk averse not the Risk adverse individual

Ans 6)

Option D is correct response

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.