Name:. Professor:. Course: PH226A Health Economics. Dat
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Name:Professor:Course: PH226A Health EconomicsDate: Homework Assignment: Risk Aversion and Demand for InsuranceQ1a) Expected values of income and utility function:E(I) = probability of being sick * sick income + probability of being healthy * normal income = p*IS + (1 – p)*IHSimilarly,E(U) = p*U(IS) + (1 – p)*U(IH) Q1b) Chart:010020030040050060005101520253035404550Risk Averse Person ChartUISE(I)IHIncomeUtilityExpected Loss in Income- Expected Expected Utility Delta U
