Suppose james has utility over wealth

Assignment Help Business Economics

Reference no: EM13742255

Suppose James has utility over wealth given by u(w) = w 1 2 . Putting utility on the y-axis and wealth on the x-axis, use a graph to show why James would rather have $100 for sure instead of a gamble where he gets $20 20% of the time and $120 the rest of the time.

Reference no: EM13742255

Questions Cloud

Decision to pursue an education in business or finance : Explain how you made the decision to pursue an education in Business or Finance. Include a summary of expenses related to that decision, such as: cost of tuition, cost of books, the interest you may pay on any loans, and any other associated expen..

Discuss how dummy variables could be applied. : Select an economic problem or theory and discuss how dummy variables could be applied. Determine the value that dummy variables would add to your analysis (think outside the box on this one – avoid obvious examples like gender, race, etc.).

Identify and discuss at least two economic phenomena : Identify and discuss at least two economic phenomena for which the linear-in-parameters/linear-in-variables regression model may not be appropriate (besides any mentioned in the text). Select an economic phenomenon and determine which of the models d..

What is the expected value of your house : Suppose you own a house in Mobile, AL. Your house is currently worth $200,000. Suppose there is a 5% chance that a food destroys your house, in which case it will be worth $0. You have $50,000 in your bank account.

Suppose james has utility over wealth : Suppose James has utility over wealth given by u(w) = w 1 2 . Putting utility on the y-axis and wealth on the x-axis, use a graph to show why James would rather have $100 for sure instead of a gamble where he gets $20 20% of the time and $120 the res..

Two-period consumption model of borrowing and saving : Consider the two-period consumption model of borrowing and saving. Suppose Claire has an income of m1 today and m2 a year from now and can borrow and lend at the interest rate r. She chooses consumption levels c1 and c2 given her well-behaved prefere..

Annually increasing renewal fee : We suggested above that an annually increasing renewal fee would be an efficient means of setting optimal patent life. Similarly, suppose that owners who wanted to restrict future use of their property had to pay a fee for each year that the restrict..

Temporary and permanent damages on the incentives : Contrast the difference between temporary and permanent damages on the incentives of people to build new houses near the cement factory

Yields an improvement that has commercial value : Recall our example of an investment of $100,000 in research that yields a pioneering invention that has no commercial value, and a subsequent investment of $50,000 in development that yields an improvement that has commercial value of $1 million.

User Account

All Pages