Demeter has 100 acres of land on which she can plant wheat or rice. The following table shows the income per acre that each crop will produce, both for a wet growing season and a dry growing season. Wet Dry Wheat 200 700 Rice 700 200 The probability of a wet growing season is 3 and the probability of a dry growing season is . Demeter's utility function over income is U(W) = In W. What is Demeter's contingent income bundle if she plants only wheat? If she plants only rice? If she plants 50 acres of wheat and 50 acres of rice? (Note: A contingent income bundle is (Ww, Wa), where the “w" subscript indicates "wet" and the “d" subscript indicates "dry".) а.
Demeter has 100 acres of land on which she can plant wheat or rice. The following table shows the income per acre that each crop will produce, both for a wet growing season and a dry growing season. Wet Dry Wheat 200 700 Rice 700 200 The probability of a wet growing season is 3 and the probability of a dry growing season is . Demeter's utility function over income is U(W) = In W. What is Demeter's contingent income bundle if she plants only wheat? If she plants only rice? If she plants 50 acres of wheat and 50 acres of rice? (Note: A contingent income bundle is (Ww, Wa), where the “w" subscript indicates "wet" and the “d" subscript indicates "dry".) а.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...
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