Use the Following to Answer Question

question 100

Multiple Choice

Use the following to answer question:
-(Scenario: Choosing Insurance) Use Scenario: Choosing Insurance.The premium on a fair insurance policy for the Ramirez family will be: 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)$0.
• B)$900.
• C)$1,000.
• D)$2,000.

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