Respuesta :
Risk averse people have declining marginal utility, and this means that the pain of a loss increases at an increasing rate as the size of the loss increases.
If the price of insurance is up to the expected loss, (i.e., if the insurance is actuarially fair), risk-averse individuals will fully insure against monetary loss. The payment assures the individual of getting the identical income no matter whether or not a loss occurs.
Reluctant to require risks; tending to avoid risks the maximum amount as possible: risk-averse entrepreneurs. of or noting insured someone who invests in stocks, bonds, etc., with lower risks and customarily lower rates of return so as to minimize the likelihood of economic loss: risk-averse investors who keep on with government bonds.
Individuals and business entities choose insurance covers even when the anticipated loss is lesser than the premiums they pay to insurance companies due to the risk-averseness of most people. Risk-averse consumers always prefer insurance that's actuarially fair but not full to full insurance that's actuarially unfair - but the alternative is true for risk-loving consumers.
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