ndicate whether the statement is true or false, and justify your answer. 1. If physicians are earning monopoly rents, then there must be more barriers to entry in the labor market for physicians than is socially optimal. 2. In the model of insurance and uncertainty discussed in this course, an individual exhibits declining marginal utility of income if and only if she is risk averse. 3. Risk-averse consumers always prefer insurance that is actuarially fair but not full to full insurance that is actuarially unfair - but the opposite is true for risk-loving consumers.
ndicate whether the statement is true or false, and justify your answer. 1. If physicians are earning monopoly rents, then there must be more barriers to entry in the labor market for physicians than is socially optimal. 2. In the model of insurance and uncertainty discussed in this course, an individual exhibits declining marginal utility of income if and only if she is risk averse. 3. Risk-averse consumers always prefer insurance that is actuarially fair but not full to full insurance that is actuarially unfair - but the opposite is true for risk-loving consumers.
Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.4P
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Indicate whether the statement is true or false, and justify your answer.
1. If physicians are earning
2. In the model of insurance and uncertainty discussed in this course, an individual exhibits declining
3. Risk-averse consumers always prefer insurance that is actuarially fair but not full to full insurance that is actuarially unfair - but the opposite is true for risk-loving consumers.
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