Suppose That Individuals with State-Independent and Risk-Averse Tastes Insure Each

question 21

True/False

Suppose that individuals with state-independent and risk-averse tastes insure each other through state-contingent trades.The competitive equilibrium price will then result in actuarily fair insurance terms.

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Definitions:

Psychokinesis

A purported psychic ability allowing a person to influence a physical system without physical interaction.

Vocal Cords

Folds of tissue in the throat that vibrate and produce sound when air is expelled from the lungs, enabling speech.

High Pitch

Frequencies of sound that are higher and usually perceived as sharper by the human ear.

Gestalt Psychology

A theory of mind which posits that psychological phenomena must be viewed as organized, structured wholes (Gestalts) rather than the sum of their parts.