Suppose Ordinarily Half Your Class Would Get an a and Half

question 8

Essay

Suppose ordinarily half your class would get an A and half would get a B, with A students having a 25% chance of getting an A and B students having a 25% of getting an A.It costs $100 to persuade the instructor to raise a B grade to an A.A student is willing to pay $40 to insure she will get her usual grade and $70 to insure she will get a higher grade than usual.
a.If all students buy insurance that guarantees them an A, what is the zero profit price for an insurance company that offers A insurance.
b.Will grade insurance be sold in equilibrium?
c.Who would buy insurance and at what price if the insurance companies could tell what type of student each student is?
d.Is either the result in (b) or (c) efficient?

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Definitions:

Cost Per Hire

The total expenses incurred by an organization in recruiting and hiring a new employee, including advertising, interviewing, and training costs.

HRM Policies

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HR Metrics

Quantitative measurements used to track and assess the efficiency and effectiveness of human resource practices within an organization.

Development Hurdle

Challenges or obstacles that must be overcome during the process of developing a new product, service, or project.