the population is evenly divided between 2 types of people: healthy people and unhealthy people. healthy people have expected health care costs of $1000 per year. unhealthy people have expected health care costs of $5000 per year. unhealthy people can become healthy by working out, eating healthier, and taking preventive care. assume that the cost of becoming healthy in terms of time and effort is $2000 per year. these people live in a city with one employer who will hire anyone who is willing to work. this employer provides complete health care to all its employees; all health care costs are covered by the insurance.
