Business, 01.11.2019 05:31 kayranicole1

Joe is currently unemployed and without health insurance coverage. he derives utility (u) from his interest income on his savings (y) according to the following function: u = 5(y1/2)joe presently makes about $40,000 of interest income per year. he realizes that there is about a 5 percent probability that he may suffer a heart attack. the cost of treatment will be about $20,000 if a heart attack occurs. calculate joe’s expected utility level without any health insurance coverage.

calculate joe’s expected income without any insurance coverage

suppose joe must pay a premium of $1,500 for health insurance coverage with acme insurance. would he buy the health insurance? why or why not?

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