please only do: if you can teach explain steps of how to solve each part: b what is the optimization to use for foc? please solve for xalso the other part Consider the insurance problem from class in which an agent with wealth w dollars faces aprobability € (0,1) of incurring a loss of dollars, where 0 < l< w. He can purchaseinsurance at a price q € (0,1) per unit that pays 1 dollar per unit purchased if the loss occurs.Suppose the agent is an expected utility maximizer with von Neumann-Morgenstern utilityu(x) = ln(x + 1). You may assume throughout this question that the parameters are suchthat the agent's expected utility maximization problem has an interior solution.(a) Find the certainty equivalent of the lottery corresponding to no insurance.Solution: We have (1-7) ln(w+1) + π ln(w −l + 1) = ln(CE+1) and hence CE =(w+1) ¹ (w − l + 1)" - 1.(b) Suppose insurance is actuarially fair. What is the effect on demand for insurance of amarginal increase in l? That is, if x is the quantity of insurance demanded, what is thevalue of əx/al?Solution: Since the DM fully insures, the quantity of insurance increases by exactly theamount of the increase in l.(c) Suppose q>. What is the effect on demand for insurance of a marginal increase in l?Solution: The FOC iswhich is equivalent toHence-q(1-π)(1-q)π(w-qx+1) (w+(1-q)x-l+1)+= 0,(w+(1-q)x-l+1)q(1 − π) = (1 − q)n(w− qx + 1).dxq(1 — q)(1 − n) — q(1 — π) = −(1 — q) q-дгde

Utility function : U(x) = ln (x+1 ) Probable loss = l Probability of loss = π Probability of no…

Consider the insurance problem from class in which an agent with wealth w dollars faces a probability € (0,1) of incurring a loss of dollars, where 0 < l< w. He can purchase insurance at a price q € (0, 1) per unit that pays 1 dollar per unit purchased if the loss occurs. Suppose the agent is an expected utility maximizer with von Neumann-Morgenstern utility u(x) = ln(x + 1). You may assume throughout this question that the parameters are such that the Ai b. Jution nel antilid stomi

Consider the insurance problem from class in which an agent with wealth w dollars faces a probability € (0,1) of incurring a loss of dollars, where 0 < l< w. He can purchase insurance at a price q € (0, 1) per unit that pays 1 dollar per unit purchased if the loss occurs. Suppose the agent is an expected utility maximizer with von Neumann-Morgenstern utility u(x) = ln(x + 1). You may assume throughout this question that the parameters are such that the Ai b. Jution nel antilid stomi

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Mr. and Mrs. Driggs have four children, all of whom are away at college. Below is a listing of expenses incurred by each child during a recent month. Еxpense CHILD Cathy David Rachel Caroline Food 150.76 344.56 266.76 222.92 Rent 475.00 300.00 395.00 225.00 Entertainment 44.67 25.00 321.56 66.56 Electricity 68.90 110.78 55.89 76.99 Auto 220.20 124.44 188.88 Insurance 87.76 55.55 144.09 47.75 Phone 45.45 88.09 25.00 37.98 Tuition 825.00 990.00 500.00 Books 332.23 433.89 779.54 210.00 Clothing 66.90 423.65 103.19 385.58 (a) Analyze the data and identify the most expensive child. (b) Analyze the data and identify the expense category of greatest cost. (c) Comment on the value of line item and object of expenditure analysis of data in a business context. How do modern information systems facilitate such analysis? (d) (optional) Pivot tables are useful tools for enhanced analysis of data. Experiment with the pivot table on the electronic worksheet template, and see if you can confirm you…
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please help me fast, thank you so much a , b, c
Which of points A–E is the most efficient? Explain.
For Question 2 there is a typo. It is supposed to say consider Ronald from question 1. Both question 1 and 2 are provided, i would appreciate if someone could complete them as soon as possible. Also this is not a graded question from an exam, it is homework l have been given although l did not purchase the textbook so cant get the solutions for it.
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