+1-415-315-9853

info@mywordsolution.com

## Economics

 Basic Economics Macroeconomics Microeconomics Business Economics Econometrics International Economics Managerial Economics Game Theory Public Economics

1. Assume that Betsy’s utility function is given by equation U=Y0.3 where Y is measured in thousands of dollars. Betsy’s current job pays her \$20,000 (Y=20) per year and she can earn this amount next year with certainty. Betsy is offered a different job but in this new job,

Betsy has a 50% chance of earning \$36,000 (Y=36) and a 50% chance of earning only \$15,000 (Y=15).

a) Should Betsy take the new job?

b) Does your answer change if Betsy’s utility function is U=Y0.9? Why?

c) Does your answer change if Betsy’s utility function is U = Y1.25? Why?

2. Many states have scratch offs with several different monetary payoffs. For ex, the “\$500 a week for life” in New York offers the payout and odds structure noted below.

(a) What is the anticipated value of playing, supposing you live 60 more years and there are 52 weeks in every year.

(b) The cost of playing is \$1. If your utility is U= V + Y, where V = entertainment value in dollars, how much V do you need to receive with certainty in order to play?

(c) Consider a dissimilar structure where you pay \$1 and the payout is \$250 with odds of winning equal to 1 and 323. Also, U = V + Y.85. What is the minimum entertainment value in this case?

Payout                   Odds

\$1                      1 and 10
\$2                      1 and 15.15
\$4                      1 and 62.5
\$5                      1 and 125
\$10                    1 and 100
\$20                    1 and 166.67
\$40                    1 and 2,100
\$100                  1 and 50,400
\$250                  1 and 126,000
\$500/wk             1 and 7,938,000

Microeconomics, Economics

• Category:- Microeconomics
• Reference No.:- M91511

Have any Question?

## Related Questions in Microeconomics

### Assignmentwhat are the most important knowledge assets at

Assignment What are the most important knowledge assets at Dirt Bikes? What functions and employee positions are responsible for creating, distributing, and using these knowledge assets? Are all of these assets explicit ...

### Economics and quantitative analysis assignmenttopic -

ECONOMICS AND QUANTITATIVE ANALYSIS ASSIGNMENT TOPIC - REGRESSION ANALYSIS Instructions - Background One of the biggest challenges in the higher education sector has been the recent growth of online universities. The Onl ...

### Samsung smartphone manufacturer vs google inc search engine

Samsung (smartphone manufacturer) Vs. Google Inc. (search engine) - economic and financial analysis Objectives: • Assess and compare the market types of Google Inc.(as a search engine) and Samsung • Determine the various ...

### Assignmentyou are the director of safety and health at

Assignment You are the Director of Safety and Health at Rotorcraft America, a mid-sized company that designs, manufactures and sells helicopters. Your organization has manufacturing operations in San Francisco, Californi ...

Assignment Bliss v. Attorney General of Canada was a Canadian Bill of Rights case. Stella Bliss' claim for maternity benefits (under the former Unemployment Insurance Act) as a form of "equality before the law" was rejec ...

### Assignmentchoose one of the readings from chapters 14 15 or

Assignment Choose one of the readings from chapters 14, 15, or 16 and summarize, explain, and evaluate the main points of the reading in a minimum of 3 paragraphs. Do not simply cut and paste from the reading, but summar ...

### Question 1 a scatter diagram is useful to determine if a

Question 1. A scatter diagram is useful to determine if a relationship exists between two variables. True False Question 2. Consider the following gasoline data: Quarter 1, Year 1, Year 2 1, 150, 156 2, 140, 148 3, 185, ...

### Question 1the document that lists and details the contents

Question 1 The document that lists and details the contents and conditions of a shipment is called: A. The Tariff B. Proof of Delivery C. The Invoice D. The Bill of Lading Question 2 Declining transport rates as the quan ...

### Assignmentdraw the graph carefully please use one graph

Assignment Draw the graph carefully. Please use one graph per country and show both the autarkyand the free trade equilibrium on each graph. Consider the following data on the factor endowments of two countries A and B: ...

• 13,132 Experts

## Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

### Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

### Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

### Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

### Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

### Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen