HW2d- Ch12 & 13_Xtns - Homework 2.d Chapters 12 and...

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Homework 2.d: Chapters 12 and 13 Chapter 12 1. Is self-insurance likely to be greater for rich or poor people? Explain. 2. How do the benefits from disability insurance compare with benefits from unemployment insurance? Compare and contrast each with respect to the factors that influence how much social insurance increases consumption smoothing. 3. Is moral hazard likely to be a bigger problem in the health insurance market or the life insurance market? Explain. 4. Suppose that you're selling life insurance, and a 40 year-old male nonsmoker asks you for a price on a $1 million policy for the next ten years. Your co-worker suggests that the rate should be based on the death rates of male nonsmokers in their 40s in the general population. What do you say? 5. Suppose that there are two regions of a state: one where car-theft is high and the other where car-theft is very low. Currently, the state allows insurance companies to charge different car insurance premiums (which include insurance against vehicle theft) based in part on where the driver lives. Suppose the government is considering a policy
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