Suppose a comprehensive plan applies to 2,000 low-risk people and 1,000 high-risk people opting for insurance coverage. If the average claim submitted by low-risk people is $200 while that submitted by high-risk people is $2,000 . what would be the net benefit accrued by a high-risk person paying the break even premium charged by the insurance company?

a. -$300
b. $1,800
c. $1,200
d. -$400

C

Economics

You might also like to view...

The lag in the political rights of women can be positively associated with the lag in female wages and skill acquisition according to Goldin (1990)

Indicate whether the statement is true or false

Economics

A GDP price index of 100 for a year implies that: a. there has been no inflation during the year

b. the price level is three times what it was in the base year. c. the price level is one hundred times what it was in the base year. d. the price level is double what it was in the base year. e. the inflation rate has been 100 percent per year since the base year.

Economics