Exam 17: Choice Making Under Uncertainty

Explore all topics

Maya's bracelet is worth $100. There is a 25% chance that it will be stolen from the locker room at the gym. Maya's utility function for money is U(W)= W². The expected value of Maya's bracelet is:

(Multiple Choice)

4.8/5

(31)

Question 81

Melanie must choose between two jobs. With job A, there is a 10% chance of earning $60,000 per year and a 90% chance of earning $50,000. With job B, there is a 50% chance of earning $46,000 and a 50% chance of earning $56,000. If Melanie is risk lover (U(W)= W²), which job will she choose?

(Multiple Choice)

4.8/5

(34)

Question 82

Suppose you are offered the following two prospects, a: (0, 1, 0: 3000, 2000, 1000)or b: (1/2, 1/4, 1/4: 3000, 2000, 1000). You are risk averse if:

(Multiple Choice)

4.9/5

(38)

Question 83

A person that is risk a verse will have indifference curves in a state space graph that are

(Multiple Choice)

5.0/5

(35)

Question 84

Stephanie's utility function is given by U = W^1/2where W is the value of her house. Her house is currently valued at $105,625. She knows that her house will be destroyed by a tornado with probability .10 this spring. If it is hit, the rubble will be worth $15,625. What is her expected utility?

(Multiple Choice)

4.7/5

(34)

Question 85

Suppose that initially an individual owns $4 and a lottery ticket. The lottery ticket will be worth $12 with probability 1/2 and worth $0 with probability 1/2. The individual's VM utility function is u(w)= w^1/2where w is wealth. What is the lowest price at which the individual would be willing to sell the lottery ticket?

(Essay)

4.7/5

(39)

Question 86

Showing 81 - 86 of 86

Maya's bracelet is worth $100. There is a 25% chance that it will be stolen from the locker room at the gym. Maya's utility function for money is U(W)= W². The expected value of Maya's bracelet is:

Melanie must choose between two jobs. With job A, there is a 10% chance of earning $60,000 per year and a 90% chance of earning $50,000. With job B, there is a 50% chance of earning $46,000 and a 50% chance of earning $56,000. If Melanie is risk lover (U(W)= W²), which job will she choose?

Suppose you are offered the following two prospects, a: (0, 1, 0: 3000, 2000, 1000)or b: (1/2, 1/4, 1/4: 3000, 2000, 1000). You are risk averse if:

A person that is risk a verse will have indifference curves in a state space graph that are

Stephanie's utility function is given by U = W^1/2where W is the value of her house. Her house is currently valued at $105,625. She knows that her house will be destroyed by a tornado with probability .10 this spring. If it is hit, the rubble will be worth $15,625. What is her expected utility?

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

Exam 17: Choice Making Under Uncertainty

Maya's bracelet is worth $100. There is a 25% chance that it will be stolen from the locker room at the gym. Maya's utility function for money is U(W)= W2. The expected value of Maya's bracelet is:

Melanie must choose between two jobs. With job A, there is a 10% chance of earning $60,000 per year and a 90% chance of earning $50,000. With job B, there is a 50% chance of earning $46,000 and a 50% chance of earning $56,000. If Melanie is risk lover (U(W)= W2), which job will she choose?

Suppose you are offered the following two prospects, a: (0, 1, 0: 3000, 2000, 1000)or b: (1/2, 1/4, 1/4: 3000, 2000, 1000). You are risk averse if:

A person that is risk a verse will have indifference curves in a state space graph that are

Stephanie's utility function is given by U = W1/2 where W is the value of her house. Her house is currently valued at $105,625. She knows that her house will be destroyed by a tornado with probability .10 this spring. If it is hit, the rubble will be worth $15,625. What is her expected utility?

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

Maya's bracelet is worth $100. There is a 25% chance that it will be stolen from the locker room at the gym. Maya's utility function for money is U(W)= W². The expected value of Maya's bracelet is:

Melanie must choose between two jobs. With job A, there is a 10% chance of earning $60,000 per year and a 90% chance of earning $50,000. With job B, there is a 50% chance of earning $46,000 and a 50% chance of earning $56,000. If Melanie is risk lover (U(W)= W²), which job will she choose?

Stephanie's utility function is given by U = W^1/2where W is the value of her house. Her house is currently valued at $105,625. She knows that her house will be destroyed by a tornado with probability .10 this spring. If it is hit, the rubble will be worth $15,625. What is her expected utility?