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1. Suppose a project has two possible outcomes. There is a 40% chance that it brings a profit of 10,000. There is a 60% chance that it brings a profit of 6,400. Suppose a decision makers utility function can be described by U(w)=w^0.5. What is this project's certainty equivalence for this decision maker?
2. A producer in a perfectly competitive industry has a cost function described by TC(q)=1400+4q+0.2q^2. If the market price is 40, what is the profit-maximizing quantity for the producer?
3. A producer in a perfectly competitive industry has a cost function described by TC(q)=1400+4q+0.2q^2. If the market price is 40 and it has already committed to paying the fixed cost, what is the maximum profit for the producer?
(1a-c) What did you learn? Why is it important? How do the Economics concepts we just covered impact the economy, you and your family, your friends and your employer?
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What comments do you have concerning the Discussion Question? What did you gain from the class discussion? How did the discussion relate to the readings?
In 2004, the board of regents responsible for all public higher education funding in a large Midwestern state hired a consultant to develop a series of enrolment forecasting models
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