SAPLINGPLUS ACCESS MICRO 1 TERM
4th Edition
ISBN: 9781319319038
Author: KRUGMAN
Publisher: MAC LTD
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Question
Chapter 20, Problem 10P
To determine
Risk Aversive and Risk Loving behavior and Expected Value
Concept Introduction:
Risk Aversive and Risk Loving behavior- A person with a decreasing MUy is a risk aversive who attempts to lower uncertainty by avoiding gambling, while a person with an increasing MUy is a risk loving person. A risk neutral person holds a psychology between the risk lover and risk aversive person. He is concerned only with the expected return.
Expected Value- The aggregate of the products of the dollar value associated with each outcome and its probability of occurrence is the expected value of the economic choices. It is a predictive value influencing economic decisions. This is also called the Mathematical Expectation or the EV of an economic experiment.
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Unit VI Assignment
Instructions: This assignment has two parts. Answer the questions using
the charts.
Part 1:
Firm 1
High Price
Low Price
High Price
8,8
0,10
Firm 2
Low Price
10,0
3,3
Question: For the above game, identify the Nash Equilibrium. Does Firm 1 have a
dominant strategy? If so, what is it? Does Firm 2 have a dominant strategy? If so,
what is it?
Your response:
Chapter 20 Solutions
SAPLINGPLUS ACCESS MICRO 1 TERM
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