Plot the following three utility functions

Assignment Help Econometrics

Reference no: EM131072460

(a) Plot the following three utility functions that relate utility U to wealth W, for values of wealth in the range 1. . . 50, using a spreadsheet tool such as Excel: UA = 2W -0.01W2 ; UB = 2W; UC = 2W +0.02W2.

(b) State whether each utility function displays risk neutrality, risk aversion or risk love.

(c) Judging from the shapes of the functions you have plotted, do they display increasing, constant or diminishing marginal utility?

Reference no: EM131072460

Questions Cloud

Find function f : Question - Let vector F(x, y) = x2i + y2j with C being the arc of the parabola y=2x2 from (-1, 2) to (2, 8). Find function f such that F→ = ∇F

Degree of operating leverage-operating breakeven point : My company makes and sells golf cart tires at $95.25 each. His fixed operating costs are $570,000 and his variable operating costs are $24. Determine the number of units he needs to rech the operating breakeven point. Now that you have found the % ch..

You must find the probability distribution : Consider the probability distribution of the time worker two takes to complete all tasks once. Assume walking times are normally distributed with same mean and variance as the triangularly distributed times. The mean and variance of a triangular ..

Plot the following three utility functions : State whether each utility function displays risk neutrality, risk aversion or risk love.

Identify the population that your sample will represent : Describe any potential pitfalls that you anticipate in conducting your survey. Identify the population that your sample will represent.

Compute the average utility associated with each game : Then compute the average utility associated with each game, given the utility values that are associated with each dollar outcome.

What is the operating breakeven point : Big company makes lug nuts and sell them at$6 a pack of 4 with a variable cost of $3.50 per pack. Their fixed operating costs are $50,000 annually. he pays $13,000 in interest each year along with $7,000 in perferred dividend, his current selling pri..

Case about to two workers and random time between arrivals : For the case of two workers and random time between arrivals, estimate the average cycle time for a part to traverse the cell using Little's Law. The cycle time is the time between entering the raw material inventory and entering the FGI.

User Account

All Pages