Economics Explain in detail how you would extend the Cox- Ross{Rubinstein binomial tree model for pricing options if instead of considering two states of nature in each period you consider three states of nature (e.g. a good state, a middle state and a bad state). Focus on a tree with two periods (periods 0, 1 and 2) and draw the corresponging trinomial tree.

Economics Explain in detail how you would extend the Cox- Ross{Rubinstein binomial tree model for pricing options if instead of considering two states of nature in each period you consider three states of nature (e.g. a good state, a middle state and a bad state). Focus on a tree with two periods (periods 0, 1 and 2) and draw the corresponging trinomial tree.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.15P

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Styles Paragraph Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately. The following table reflects the options she is considering and the effect on health Home Good Z Health H Meal Steak and eggs +9 -4 -5 +18 Kale salad and broccoli -18 Double cheeseburger deluxe with coke 12 A miracle pill "Actosfast" is discovered that halves the negative health impact of food. What would the new choice be If Trigleater's single period utility function is given by U=5Z+2H and she can only select one item from the table above, what would be her total utility after selecting the optimal meal Will Kale salad C B.with broccoli Double Cheeseburger C C.Deluxe with coke Steak C A. and eggs C D.not eat
Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately. The following table reflects the options she is considering and the effect on health Meal Home Good Z Health H Steak and eggs +9 -4 Kale salad and broccoli -5 +18 Double cheeseburger deluxe with coke 12 -18 If Trigleater's single period utility function is given by U=5Z+2H and she can only select one item from the table above. Allpositive is a new promising pharmaceutical company came with a new supplement "Bestofboth" that will halve the negative health effect and at the same time double the positive health…
Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately. The following table reflects the options she is considering and the effect on health Meal Home Good Z Health H Steak and eggs +9 -4 Kale salad and broccoli -5 +18 Double cheeseburger deluxe with coke 12 -18 A miracle pill "Actosfast" is discovered that halves the negative health impact of food. What would the new choice be If Trigleater's single period utility function is given by U=5Z+2H and she can only select one item from the table above, what would be her total utility after selecting the optimal meal
Paragraph Styles Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately. The following table reflects the options she is considering and the effect on health Meal Home Good Z Health H Steak and eggs +9 -4 Kale salad and broccoli -5 +18 Double cheeseburger deluxe with coke If Trigleater's single period utility function is given by U-5Z+2H and she can only select one item from the table above. 12 -18 Allpositive is a new promising pharmaceutical company came with a new supplement "Bestofboth" that will halve the negative health effect and at the same time double the positive health effects. What would be the optimal selection if she takes Bestofboth supplement and what would be the maximum utility Kale salad with broccoli max utility = 47 Double Cheeseburger deluxe with coke max utility = 102 Steak and…
Nutritional economics. Suppose we are considering a hungry individual in the Gross-man model deciding what to have for dinner. His options are listed in Table 3.2. Each dish has an effect on the level of the home good Z and health H.a. Suppose the diner’s single-period utility function is as follows: U = 3Z + HIf the diner is trying to maximize his single-period utility, and he can only select one item from Table 3.2, which meal would he choose?b. A miracle pill is discovered that halves the negative health impact of cookies. How does this impact the diner’s choice?c. What effect does the miracle pill have on the diner’s health H? Interpret this result.Does this mean the diner would be better off without the miracle pill?d. If the diner is instead trying to maximize his lifetime utility and not just his single-period utility, how might your answer to Exercise 16(a) change? Is he likely to value Z or H more in the lifetime context than the single-period context? Explain your answer, and…
what is marcoeconomic?
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Can you provide the mathematical working out and the mircroeconomic explanation , please do not provide a AI answer , i have submitted this question 4 times already cause everytime its an AI answer and i get word for word from chat gpt what is written
Suppose an individual in the Grossman model is trying to decide what to have for dinner. His options are as below. Each dish has an effect on the level of home good Z and health H. Мeal Home good Z Health H Steak and eggs +7 -2 Kale salad with broccoli -2 +5 Entire box of cookies +10 -20 Suppose the dinner's single-period utility function is U=3Z+H 1. If the individual is trying to maximize his single-period utility, and he can only select one item from the table (assuming he can afford any item in the table). Which meal would he choose? Explain your answer. 2. A miracle pill is discovered that halves the negative health impact of cookies. How does this impact the individual's choice? Explain your answer. 3. If the individual lives in multi-period rather than single-period, would he value Z or H more in multi-period? Explain your answer. Paragraph I U v A •.. > lili B
Why does the ceteris paribus assumption allow economists to focus on the variable they are interested in? Give an example.
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Nutritional economics. Suppose we are considering a hungry individual in the Grossman model deciding what to have for dinner. His options are listed in Table 3.2. Each dish has an effect on the level of the home good Z and health H. a. Suppose the diner’s single-period utility function is as follows:U =3Z +HIf the diner is trying to maximize his single-period utility, and he can only select one item from Table 3.2, which meal would he choose? b. If the diner is instead trying to maximize his lifetime utility and not just his single period utility, how might your answer to Exercise 16(a) change? Is he likely to value Z or H more in the lifetime context than the single-period context? Explain your answer, and be sure to invoke the concept of a capital good