« previous next »

Author Question: Assume that the utility function of an individual is represented as U = W - 0.001W; where W (his ... (Read 67 times)

pane00

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
Assume that the utility function of an individual is represented as U = W - 0.001W; where W (his present wealth) = 250,000 . He considers investing in a gamble which would double his wealth if he wins but still leave him with 250,000 if he loses. Given that his probability of winning is 0.6, calculate his expected utility of taking the bet.
 a. 157 units
  b. 250 units
  c. 207.11 units
  d. 224.3 units

Question 2

In the consumption of public goods
 A) consumers can be excluded.
  B) free riders can be excluded.
  C) consumers cannot be excluded.
  D) government is excluded.


Beatricemm

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

It is difficult to obtain enough calcium without consuming milk or other dairy foods.

Did you know?

Asthma occurs in one in 11 children and in one in 12 adults. African Americans and Latinos have a higher risk for developing asthma than other groups.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Human immunodeficiency virus gains entry into helper T cells, uses the cell DNA to replicate, interf Human immunodeficiency virus gains entry into helper T cells, uses the cell DNA to replicate, interf
A sphere represented by means of modeling. A sphere represented by means of modeling.
Individual Tubule Functions Individual Tubule Functions
Integral of function p2 Integral of function p2
Sketch a graph of the inverse of each exponential function. Sketch a graph of the inverse of each exponential function.
Solve the following log function: Solve the following log function:
Video: Eczema

For a complete list of videos, visit our video library