Medical exam required by insurance company, why? - Info asymmetry exists btw investor (customer investing in policy) and company. If no exam was done, the insurance company would offer the policy at an average price and healthy “good” customers would not buy the policy. Only lemons would purchase the policy and this result is adverse selection. Adverse selection leads to market failure because all the good customers are pushed out of the market and eventually the insurance companies would stop
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securities. In order to help us understand why, Chapter 10 in the book gave a great example on insurance companies. Let’s consider two types of home insurance: theft insurance and earthquake insurance. Lets also suppose that the risk of these two hazards is similar for a given home in a given area. Based on this information we would know that the risks of the individual policies are similar, however, the risks of the portfolios might be drastically different. For example, if the chance of theft in
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Can Economics Solve the Problem of Global Warming? The potential negative effects of global warming are very serious. Even by just concentrating on economic factors, global warming has the potential to cause unprecedented costs to the global economy. Yet, despite the forecasted dangers and economic costs, there seems to be a disinterest in implementing necessary policies to avert the consequences of global warming. There are many reasons why it is difficult to deal with the issue of global warming
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Mr.Vern Furtney,CFP Agent/Owner The Co-operators Vern Furtney Agency 45 Welland Avenue St. Catherines On, L2R2M4 Dear Sir, This is in response to the questions you asked me prior to short listing. Why an Insurance Company? I applied to your insurance company generally because I possess Administrative experience in an organizational setting. I worked for a real estate company directly with the owner and broker of the company. I was involved in a lot of prospecting and I made a lot
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Public Economics and Public Finance Homework 7 Question 1. Based on Gruber 12.13 Your utility function is U = ln(2C ) where C is the amount of consumption you have in any given period. Your income is $40,000 per year and there is a 2% chance that you will be involved in a catastrophic accident that will cost you $30,000 next year. A. What is your expected utility? B. Calculate an actuarially fair insurance premium. What would your expected utility be were you to purchase the actuarially fair insurance
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Super Freakonomics: Short Essay questions Chapter 1: Describe the evidence that suggests that Chicago prostitutes engage in price discrimination. In addition, explain why it is possible for this particular instance of price discrimination to be successful. There is a couple of different things that directly show how Chicago prostitutes engage in price discrimination, the first is by skin color. The book directly says “Prostitutes do not charge all customers the same price. Black customers
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Homework Week 7 17.1 Global Expansion: Malaysia = (0.3*1,200,000) + (0.3*600,000) + (0.4*0) = 360,000 + 180,000 = $540,000 Philippines = (0.3*1,000,000) + (0.5*320,000) + (0.2*0) = 300,000 + 160,000 = $460,000 Singapore = (0.7*700,000) + (0.2*400,000) + (0.1*0) = 490,000 + 80,000 = $570,000 You should enter Singapore’s market due to their highest expected sales compared to Malaysia and the Philippines. Total Revenue = 10*570,000 = $5,700
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I. Introduction a. Brief review of the concept of healthcare reform b. A thesis statement II. Effects of healthcare reforms on an insurance industry a. Reduces company’s profit margins b. Reduces company’s administrative costs III. Conclusion IV. Works Cited Healthcare reform affects patients, healthcare providers, government spending and biomedical researchers. A good healthcare reform should be cost effective in its implementations and affordability
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Arthur Anderson 1. Environment, strategic, organizational changes * High quality accounting, promoting integrity and sound audit opinions over short run profits * 1930’s- government adopted laws that require public companies to submit financial statements to independent auditor each year * mantra- good service, quality audits, well managed staff, profits for firm * auditors rewarded for making sound auditing decisions * decision rights to Professional Standards Group *
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Externalities arise when a person or a firm’s actions affect the welfare of others in ways that are not reflected in market prices (spillover effect). In this essay, I will discuss the characteristics of externalities, their control and implications on the free market as well as discussing the ways in which governments can assist to develop and implement policies that can encourage positive externalities. (Lipsey and Chrystal, 2001) (Donohue, et al, 2008:RB2). Externalities
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