You have a house worth 300,000. A fire will burn everything to the ground and leave $0 in value. Assume full coverage in the case of a fıre. In every given year, there is a 5% probability that your home burns. If your Utility function is U=Wealth/2 How much would you be willing to pay (the premium) for insurance? O 15,800 O 45,850 O 15,000 O 29,250

You have a house worth 300,000. A fire will burn everything to the ground and leave $0 in value. Assume full coverage in the case of a fıre. In every given year, there is a 5% probability that your home burns. If your Utility function is U=Wealth/2 How much would you be willing to pay (the premium) for insurance? O 15,800 O 45,850 O 15,000 O 29,250

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.5P

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