People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km. Which plan is a better deal? 100 90 80 70 60 50 40 30 20 10 о 0 100 200 300 400 500 600 700 800 XAxis Nearly all decisions can be written as choice problems 6. Children are a discrete choice: u(x, y) = x 1/2 + y1/2, m = 16, py = 1. How much of your daily m will you give up to have x = 1 kid? How about x = 4 kids? X Axis People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40 + 0.10 per km. Which plan is a better deal? Y Axis 100 90 80 80 70 60 50 40 30 20 20 10 10 0 0 100 200 300 3000 400 X Axis 8 500 600 700 800
People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km. Which plan is a better deal? 100 90 80 70 60 50 40 30 20 10 о 0 100 200 300 400 500 600 700 800 XAxis Nearly all decisions can be written as choice problems 6. Children are a discrete choice: u(x, y) = x 1/2 + y1/2, m = 16, py = 1. How much of your daily m will you give up to have x = 1 kid? How about x = 4 kids? X Axis People will choose the alternative with the highest utility 5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40 + 0.10 per km. Which plan is a better deal? Y Axis 100 90 80 80 70 60 50 40 30 20 20 10 10 0 0 100 200 300 3000 400 X Axis 8 500 600 700 800
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter21: Getting Employees To Work In The Firm’s Best Interests
Section: Chapter Questions
Problem 21.2IP
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Question
Pls fill out/explain to me these notes and explanations, thanks
Transcribed Image Text:People will choose the alternative with the highest utility
5. Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40+ 0.10 per km.
Which plan is a better deal?
100
90
80
70
60
50
40
30
20
10
о
0
100
200
300
400
500
600
700
800
XAxis
Nearly all decisions can be written as choice problems
6. Children are a discrete choice: u(x, y) = x 1/2 + y1/2, m = 16, py = 1. How much of your daily m will you give up
to have x = 1 kid? How about x = 4 kids?
X Axis
Transcribed Image Text:People will choose the alternative with the highest utility
5.
Rental Plans: u(x, y) = x1/2y1/2, m = 120, py = 1. Plan A is fee 20+ 0.20 per km, Plan C is fee 40 + 0.10 per km.
Which plan is a better deal?
Y Axis
100
90
80
80
70
60
50
40
30
20
20
10
10
0
0
100
200
300
3000
400
X Axis
8
500
600
700
800
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