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62. Multiple Choice: Reference: Ref 20-5 (Table: Income a...
Question
Reference: Ref 20-5
(Table: Income and Utility for Rahim) Look at the table Income and Utility for
Rahim. The expected value of Rahim's income is:
63. Multiple Choice: Reference: Ref 20-5 (Table: Income a...
Question
Reference: Ref 20-5
(Table: Income and Utility for Rahim) Look at the table Income and Utility for
Rahim. Rahim's expected utility from income is:
64. Multiple Choice: Reference: Ref 20-6 (Table: Income a...
Points: 0
Points: 0
Points: 0
Question
Reference: Ref 20-6
(Table: Income and Utility for Tyler) The table Income and Utility for Tyler shows the
utility Tyler receives at various income levels, but she does not know what her
income will be next year. There is a 40% chance her income will be $20,000, a
40% chance her income will be $30,000, and a 20% chance her income will be
$40,000. We know that Tyler is risk-averse because:
65. Multiple Choice: Reference: Ref 20-6 (Table: Income a...
Question
Points: 0
Reference: Ref 20-6
(Table: Income and Utility for Tyler) The table Income and Utility for Tyler shows the
utility Tyler receives at various income levels, but she does not know what her
income will be next year. There is a 40% chance her income will be $20,000, a
40% chance her income will be $30,000, and a 20% chance her income will be
$40,000. What is her expected income?
66. Multiple Choice: Reference: Ref 20-6 (Table: Income a...
Question
Points: 0
Reference: Ref 20-6
(Table: Income and Utility for Tyler) The table Income and Utility for Tyler shows the
utility Tyler receives at various income levels, but she does not know what her
income will be next year. There is a 40% chance her income will be $20,000, a
40% chance her income will be $30,000, and a 20% chance her income will be
$40,000. What is her expected utility?
67. Multiple Choice: Reference: Ref 20-6 (Table: Income a...
Question
Points: 0
Reference: Ref 20-6
(Table: Income and Utility for Tyler) The table Income and Utility for Tyler shows the
utility Tyler receives at various income levels, but she does not know what her
income will be next year. There is a 40% chance her income will be $20,000, a
40% chance her income will be $30,000, and a 20% chance her income will be
$40,000. What level of certain income gives her the same utility as her expected
utility, given the uncertainty?
68. Multiple Choice: Reference: Ref 20-6 (Table: Income a...
Question
Points: 0
Reference: Ref 20-6
(Table: Income and Utility for Tyler) The table Income and Utility for Tyler shows the
utility Tyler receives at various income levels, but she does not know what her
income will be next year. There is a 40% chance her income will be $20,000, a
40% chance her income will be $30,000, and a 20% chance her income will be
$40,000. What is the maximum amount of insurance Tyler would be willing to pay
to guarantee an income of $28,000?
69. Multiple Choice: Reference: Ref 20-7 (Table: Natasha'...
Question
Points: 0
Reference: Ref 20-7
(Table: Natasha's Total Utility) Look at the table Natasha's Total Utility. Natasha
experiences ________ marginal utility as her income increases. The marginal
utility of income between $30,000 and $32,500 is ________ utils per dollar, while it
is ________ utils per dollar between $47,500 and $50,000.
70. Multiple Choice: Reference: Ref 20-7 (Table: Natasha'...
Question
Points: 0
Reference: Ref 20-7
(Table: Natasha's Total Utility) Look at the table Natasha's Total Utility. Natasha
earns $50,000 per year but faces losing $20,000 of it if she is late with her work. If
there is a 25% probability that Natasha will be late with her work and her income
will then equal $30,000, her expected income is:
71. Multiple Choice: Reference: Ref 20-7 (Table: Natasha'...
Question
Points: 0
Reference: Ref 20-7
(Table: Natasha's Total Utility) Natasha earns $50,000 per year but faces losing
$20,000 of it if she is late with her work. If there is a 25% probability that Natasha
will be late with her work and her income will then equal $30,000, her expected
total utility is ________ utils.
72. Multiple Choice: Reference: Ref 20-7 (Table: Natasha'...
Question
Points: 0
Reference: Ref 20-7
(Table: Natasha's Total Utility) Look at the table Natasha's Total Utility. Natasha
earns $50,000 per year but faces losing $20,000 of it if she is late with her work. If
there is a 25% probability that Natasha will be late with her work and her income
will equal $30,000, what certain income leaves Natasha just as well off as her
uncertain income?
73. Multiple Choice: Reference: Ref 20-7 (Table: Natasha'...
Question
Points: 0
Reference: Ref 20-7
(Table: Natasha's Total Utility) Look at the table Natasha's Total Utility. Natasha
earns $50,000 per year but faces losing $20,000 of it if she is late with her work. If
there is a 25% probability that Natasha will be late with her work and her income
will equal $30,000, Natasha would be willing to pay ________ for insurance to
eliminate the uncertainty in her income. Natasha wants a guaranteed income of
$50,000.
74. Multiple Choice: Reference: Ref 20-7 (Table: Natasha'...
Question
Points: 0
Reference: Ref 20-7
(Table: Natasha's Total Utility) Look at the table Natasha's Total Utility. Natasha
earns $50,000 per year but faces losing $20,000 of it if she is late with her work. If
there is a 25% probability that Natasha will be late with her work and her income
will equal $30,000, the premium for a fair insurance policy to eliminate the
uncertainty in her income would equal:
75. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) Look at the table Total
Utility of Income After College Expenses. The Smith family experiences ________
marginal utility as income increases. The marginal utility of income between
$32,500 and $35,000 is ________ utils per dollar, while it is ________ utils per
dollar between $45,000 and $47,500.
76. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) Look at the table Total
Utility of Income After College Expenses. The Smith family's expected income after
tuition is:
77. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) Look at the table Total
Utility of Income After College Expenses. The Smith family's expected total utility
is ________ utils.
78. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) Look at the table Total
Utility of Income After College Expenses. What certain income after tuition leaves
Mr. and Mrs. Smith just as well off as their uncertain income after tuition?
79. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) Look at the table Total
Utility of Income After College Expenses. Mr. and Mrs. Smith would be willing to
pay as much as ________ for insurance to pay their daughter's tuition and
eliminate the uncertainty in the family's income after tuition.
80. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) Look at the table Total
Utility of Income After College Expenses. The premium for a fair insurance policy to
pay their daughter's tuition and eliminate the uncertainty in the Smith family's
income after tuition would equal:
81. Multiple Choice: Reference: Ref 20-8 (Table: Total Ut...
Question
Points: 0
Reference: Ref 20-8
(Table: Total Utility of Income After College Expenses) The Smith family will
choose to purchase insurance:
82. Multiple Choice: Reference: Ref 20-9 (Table: Choice w...
Question
Points: 0
Reference: Ref 20-9
(Table: Choice with Uncertainty) Look at the table Choice with Uncertainty.
Suppose the probability that the sitcom does not make it to television is 50%, that
it makes it to television but is not the most viewed show in its time slot is 30%,
and that it makes it to television and is the most viewed show in its time slot is
20%. Given this information, Norman's expected income is:
83. Multiple Choice: Reference: Ref 20-9 (Table: Choice w...
Question
Points: 0
