Indicate whether the statement is true or false, and justify your answer.The Rothschild–Stiglitz model predicts that people who own life insurance should have fewer unobserved traits (that is, unobserved by insurance companies) that lead to a higher risk of death when compared against people with the same level of income but who do not own life insurance.

Indicate whether the statement is true or false, and justify your answer.In the framework of the Grossman model, an individual’s level of health is completely controlled by her actions. Thus, in any given period, an individual is unconstrained in her choice of health status.

Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately.  The following table reflects the options she is considering and the effect on health Meal                                                        Home Good Z             Health H Steak and eggs                                            +9                                   -4 Kale salad and broccoli                               -5                                  +18 Double cheeseburger deluxe with coke    12                                -18 If Trigleater's single period utility function is given by U=5Z+2H and she can only select one item from the table above. Allpositive is a new promising pharmaceutical company came with a new supplement "Bestofboth" that will halve the negative health effect and at the same time double the positive health…

You and your research partner want to use Instrumental Variable analysis to write an econometrics paper and find causal estimates. Your partner argues that because the residuals and the instrument are uncorrelated, the exogeneity requirement is satisfied. What do you tell your research partner: a) You agree, the exogeneity requirement is satisfied by construction  b) You agree, the exogeneity requirement is satisfied by their demonstration c) You disagree, you would need the results of the White Test to make this conclusion d) You disagree, the exogeneity requirement cannot be tested as we do not observe the error terms e) You cannot make any conclusions with the current information

Assume you have the following von Neumann-Morgenstern utility function: u(w)=10000-(200-w/1000)^2 with w denoting wealth Work out the first-order condition

In order to encourage energy conservation, many public utility companiescharge consumers a higher rate on units of electricity consumed in excess of some threshold amount. In contrast, a common practice by other firms is to offer “quantity discounts” to consumers who purchase large quantities of a good. Suppose income is $100, PX = $2 if the consumer buys less than 40 units of X, and PY = $5.A. For the energy case, assume PX = $3 if the consumer buys more than 40 units of XB. For the “quantity discounts” case, assume PX = $1 after 40 units of X were consumed Draw the budget constraints in each of the cases above. What are the implications of the opportunity sets in terms of consumer behavior to consume each of the products?

Which axiom of the exponential discounted utility model is violated by the quasi-hyperbolic ( β,δ) model? Explain.

A typical consumer has a well-behaved preference structure for his consumption bundle which includes only two goods, A and B.  assume that commodity A is normal and commodity B is inferior. By keeping commodity A on the x-axis and commodity B on the y-axis you are required to show the price decomposition for commodity B when $PB increases exogenously relative to $PA. Please Answer the question by using well labelled diagrams

A teacher observes that the mitterm grades of students in the class varies depending on “the number of classes that the student takes”, “the difficulty of the assignments”, and the “stress experienced by the student”. She assigns to you the task of doing a research project on this and wants you to do the following: a. Give the project a suitable title b. What is the research question? c. Clearly label the variables (dependent and independent) d. Develop three hypotheses