Use the Following to Answer Question

question 85

Multiple Choice

Use the following to answer question:
-(Scenario: Choosing Insurance) Use Scenario: Choosing Insurance.For $2,000,the Ramirez family can buy insurance that will cover the full cost of repairs.If family members are risk-averse and want to maximize their expected utility,they will: Scenario: Choosing Insurance
The Ramirez family owns three cars and is considering buying insurance to cover the cost of repairs.They face two possible states: in state 1,their cars need no repairs and their income available for purchasing other goods and services is $50,000;in state 2,their cars need $10,000 worth of repairs and their income available for purchasing other goods and services is reduced to $40,000.The probability of repairs is 10%,while the probability of no repairs is 90%.

• A)buy the insurance.
• B)be indifferent between buying and not buying the insurance since their expected income for purchasing other goods and services is $48,000 regardless of what they do.
• C)buy the insurance as long as the utility of having a certain income of $48,000 to buy goods and services other than car repairs is higher than the utility associated with their expected income without insurance.
• D)self-insure.

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Definitions:

Diversity Competency

The ability to understand, respect, and value the differences between individuals, including those of different races, ethnicities, genders, ages, religions, disabilities, and sexual orientations, among others.

Diverse Workforce

A group of employees in an organization that includes a variety of different characteristics, such as cultural background, gender, age, and abilities.

Lateral Thinking Method

A problem-solving approach that involves looking at the situation from different perspectives rather than proceeding linearly.

Deliberate Process

A methodical or planned series of actions aimed at achieving a particular outcome, involving conscious thought and consideration.