Economics 330t Exam 1 Solutions

This study source was downloaded by 100000802832151 from CourseHero.com on 11-02-2022 01:32:23 GMT -05:00https://www.coursehero.com/file/14144771/Exam-1-Solutions/ Economics 330TEXAM 1 SOLUTIONSHelen SchneiderSpring 2016This study source was downloaded by 100000802832151 from CourseHero.com on 11-02-2022 01:32:23 GMT -05:00https://www.coursehero.com/file/14144771/Exam-1-Solutions/Part I. True/False. No credit will be given for answers without explanations. In their Why Have Americans Become More Obese? Cutler et al. find that low energy expenditure and inactive lifestyle in the United States are the biggest contributors to the rise in obesity. False. Higher caloric intake (due to technological improvements in food technologies) that leads to lowerprice and time expenditures was found to be the biggest contributors to the rise in obesity. Energy expenditures did not change over the time period of this study when obesity rates increased sharply. Risk-averse individuals have diminishing marginal utility of income and therefore are always willing to buy health insurance. False or Uncertain. Risk-averse individuals have diminishing marginal utility of income and therefore arealways willing to buy health insurance at actuarially fair premium . However, when loading fee is above risk premium, even risk-averse individual may not buy health insurance.Full credit will also be given to explanations that point out possibility of moral hazard preventing risk averse individuals from purchasing