Answer:
a. 3,900
Explanation:
We find the probability of healthy persons & the weak out of the total population in the town.
Probability of healthy persons
P(h) = 600/1000
P(h) = 0.6
Probability of weak persons
P(w) = 400/1000
P(w) = 0.4
We find the pay off for both the healthy and the weak, then add up to get the expected value or the minimal annual premium
Expected Value = 0.6*$500 + 0.4*$9000
Expected Value = $300 + $9000
Expected Value = $3,900
So, the annual premium must be at least $3,900.
Answer:
The transaction allows a seller to take pride in its product
Explanation:
Have a good one!
Decision making in the international environment is more complex than it is in a purely domestic environment.
<u>Explanation:</u>
A decision making is considered as a process that not only involves of making different choices out of the various alternatives available but also involves the step of identifying such alternatives and assessing them in a proper way. While making various decision is foreign environment, it is considered as a complex process.
Thus, out of the given options, the correct option is – more complex than.
Answer: Protectionism
Explanation:
Protectionism occurs when the industries in a particular country are being protected from foreign competition by the government of that economy. Protectionism is done through the imposition of tariffs, quotas or total ban on the products of other countries.
In the question, the tariff on rice is an example of protectionism as the tariff will lead to an increase in the price of the foreign rice and the people will have to buy from the local rice suppliers. In this case, the local industry is protected.
<h2>The economic problem in this story is know as: <u>Adverse selection</u></h2>
Explanation:
Adverse selection is a term associated with the situation where "a buyer knows few details which the seller is unaware" and vice versa.
The buyer do not match with the expectation of seller and vice-versa.
Best example is the "insurance policy".
The insurer who works in dangerous job like race car, working with explosives, etc but the insurance company does not know that he / she is working in high risk job.
Also sicker people are more dangerous to the insurance company, since they will claim for sure.
