2. Economics
3. if there is no uncertainty in society it is possible...

# Question: if there is no uncertainty in society it is possible...

###### Question details

If there is no uncertainty in society,

 it is possible for the probability of being sick to equal 20%
 people will be willing to pay high premiums
 the expected income when sick will always equal $100  the expected income when healthy will always equal$1 million
 the probabilities of being healthy or sick is either 100% or zero %

Which of the following is true? With the assumption of risk-aversion and FAIR insurance, for a given probability of being sick and expected income,

 utility with no insurance > utility from partial insurance > utility from full insurance
 utility with no insurance > utility from partial insurance = utility form full insurance
 utility with no insurance = utility from partial insurance = utility form full insurance
 utility with no insurance < utility from partial insurance > utility form full insurance
 utility with no insurance < utility from partial insurance < utility from full insurance

In 2018, Bannon's Income when sick = IS , income when healthy = IH , probability of being sick (p). The Expected Income = E(I18)

In 2019, everything is the same except income when healthy is greater than in 2018. It is equal to: IH + a

What will be the difference between E(I19) and E(I18) ?

 a
 IH + a
 a x (p)
 a x (1 - p)
 a x IS