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Suppose Lily's Indifference Curves Are Defined as U = √FS

Question 56

Multiple Choice

Suppose Lily's indifference curves are defined as U = √FS + √FH,where FS is consumption during sunny weather and FH is consumption during a hurricane.Lily receives 64 units of food when it is sunny and 16 units of food when there is a hurricane.If the probability of sunshine is Π = 0.5,the expected consumption is:


A) 52
B) 28
C) 40
D) 5

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