30) Suppose Brandon's indifference curves are 3 defined as U = (³)√√F¸ + (1)√FH S where F's is consumption during sunny weather and FH is consumption during a hurricane. Further suppose Brandon receives 64 units of food when it is sunny and 16 units when there is a hurricane. If the probability of sunshine is II = 0.75, expected food consumption is A) 28. B) 40. C) 52. D) 80.
30) Suppose Brandon's indifference curves are 3 defined as U = (³)√√F¸ + (1)√FH S where F's is consumption during sunny weather and FH is consumption during a hurricane. Further suppose Brandon receives 64 units of food when it is sunny and 16 units when there is a hurricane. If the probability of sunshine is II = 0.75, expected food consumption is A) 28. B) 40. C) 52. D) 80.
Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.11P
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Question
I need help with #30 please
Transcribed Image Text:8:44
... 98% |
10 lungem tu
the constant expected consumption
line at a point on the guaranteed
consumption line.
C)
B) he views variability as a bad thing.
for a given level of expected
consumption, he prefers the
riskless bundle to a risky one.
D) All of these answer choices are
correct.
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ZONE
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1113 1HullICICHIC
CUI V
30) Suppose Brandon's indifference curves are
3
defined as U = (³)√√F¸ + (7)√FH²
S
H'
where F, is consumption during sunny
weather and FH is consumption during a
hurricane. Further suppose Brandon
receives 64 units of food when it is sunny
and 16 units when there is a hurricane. If
the probability of sunshine is II = 0.75,
expected food consumption is
A) 28.
B) 40.
C) 52.
D) 80.
31) A person is risk loving if
A) for a given level of expected
consumption, he prefers a risky
bundle to a risk less one.
B) his indifference curve is convex to
the origin.
C) his indifference curve is concave to
the origin.
D) his indifference curve is concave to
the origin and for a given level of
oynocted consumption ho profors a
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