User Account

All Pages

What is adwoa present value of seeing the movie tomorrow

Assignment Help Microeconomics
Reference no: EM133525937

Case Study: Adwoa's friend tells her that 2001: A Space Odyssey is good. Adwoa is trying to decide between reading the book and watching the movie.

Assume that the movie yields an immediate utility of 1 in the single period (single day) during which Adwoa watches it, and a utility of 0 thereafter.

Assume that the book yields a utility of 0.1 for each of 100 periods during which she reads it, and a utility of 0 thereafter.

Adwoa's utility function at time tis Ut=u(ct)+β∑∞i=t+1δiu(Ci), representing the fact that she discounts the utility of future consumption.

First, suppose that β=0.5 and δ=0.92.

Question a)What is Adwoa's present value of seeing the movie tomorrow (one period from now)?

Question b)What is Adwoa's present value of reading the book, starting tomorrow (one period from now)?

Question c)Which does she plan to choose tomorrow?

Question d) This utility function is time inconsistent. Did this particular example actually demonstrate time inconsistency?

 

Reference no: EM133525937

Questions Cloud

How can we study bullying at the macro level : How can we study bullying at the macro level? How could we study bullying at the micro level? Draw on the materials from Week 3
Discuss the concept of monopolistic competition as it relate : discuss the concept of monopolistic competition as it relates to Nordstroms market and entry strategy in Canada. Please include the necessary citations
Describes how women often engage in work outside : Describes how women often engage in work outside of the home, while, at the same time, performing a majority of the work inside of the home
Why is the case study of agnes important : Why is the case study of Agnes important for the thesis of "Doing Gender" and how might Agnes' experiences learning to accomplish gender be different today
What is adwoa present value of seeing the movie tomorrow : What is Adwoa's present value of seeing the movie tomorrow (one period from now)? What is Adwoa's present value of reading the book, starting tomorrow
Calculate the expected frequencies for each of the levels : Calculate the expected frequencies for each of the levels of your variable. Clearly label each group and show all work involving your calculations.
Describe either a particular interest of yours : Describe either a particular interest of yours that relates to sustainability, or if you don't know enough yet to identify a particular interest, identify
What are the key points of age stratification theory : What are the key points of age stratification theory and how could age stratification lead to ageism?
Description to example of pseudoscience : Description to an example of pseudoscience. The pseudoscientific idea can be presented in any of the previously mentioned mediums

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd