Friday
April 18, 2014

Homework Help: stu

Posted by nguyen hong minh on Sunday, October 21, 2012 at 5:03am.

An individual with utility function U(X) = X2 bought Lottery A and Lottery B.
Lottery A gives a payoff of $2 or $4 equally likely.
Lottery B gives a payoff of $4 or $8 equally likely.
a) Calculate the expected utility of Lottery A and Lottery B together.
b) What is the certainty equivalent of Lottery A and Lottery B together?
c) Find the maximum price which this individual is willing to pay for both lotteries.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

economics - There are two goods 1 and 2. Denote by (x1; x2) the consumption ...
fin - 4. If an individual's utility function for coffee (x) and cream (y) is ...
macroeconomic theory - 4. If an individual's utility function for coffee (x) and...
Economics - If utility is U(x,y) = x^0.3 y^0.7 (i.e x* = 0.3I/Px and y* = 0.7I/...
Economics - If utility is U(x,y) = xy + y, what is the indirect utility function...
microeconomics - Suppose a person has a utility function U=YX. What is the ...
economics - Suppose a person has a utility function U=YX. What is the minimum ...
marketing - how are: goods services utility form utility place utility time ...
Micro econ - 1: Suppose John had a utility function of U=X^2/3Y^1/3 . Derive ...
Algebra2 - Complete parts a c for each quadratic function. a. Find the y-...

Search
Members