Author Question: Nancy's utility of wealth curve is given in the above figure. She is faced with a risky proposition ... (Read 32 times)

erika · **on:** Jun 29, 2018

Nancy's utility of wealth curve is given in the above figure. She is faced with a risky proposition which yields an income of 50 one-third of the time, 100 one-third of the time, and 150 one-third of the time. Her expected utility is

A) 100.
B) 140.
C) 150.
D) 420.

Question 2

Suppose Target decided to lower the price on all shirts as part of its Back to School promotion. The cross elasticity of demand between pants and shirts is negative.

Lowering the price on shirts will ________ the demand for pants because shirts and pants are ________. A) increase; substitutes
B) decrease; substitutes
C) increase; complements
D) decrease; complements