Total amount of money taken by the family business

Assignment Help Macroeconomics
Reference no: EM131097435

A family of five brothers namely (Ade, Bode , Clement, Diran and  Effiong) runs the business of their late parent. By agreement, they collectively take decision based on majority as to what job to take or not. A private company (P) offers the family business a job, whose pay depends on certain conditions. They all agree that if they take up the job, there is a 25% chance they will succeed and make N4000 for the company, a 35% chance they will earn N1000 and a 40% chance that they earn nothing. If they take up the job, they must forgo another offer from a government enterprise (G) in which they believe that they will earn N2000 with certainty. Assume that:

Ade has utility function U(X) = X,  Bode has utility function U(X) , Clement has utility function U(X) = X4/5, Diran has utility function U(X) = X1/2, Effiong has utility function U(X) = X1/4, where X is the total amount of money taken by the family business.

  • Which of the jobs will the familybusiness take , based on expected monetary value (EMV) of return?
  • Given their utility functions, how would each of the brothers vote for the jobs?
  • Based on your result in "b'', will the brothers take the private company offer or not?

Reference no: EM131097435

Questions Cloud

Propose an mimo pi controller for two cognitive radios : Propose an MIMO PI controller for two cognitive radios pairs as shown in Figure 10.15. Use MATLAB to simulate the controller's response with static as well as dynamic channels.
Social cost of a monopoly : What is the social cost of a monopoly? Explain. Explain why the amount that firms spend on advertising depends upon the characteristics of their products.
The after-tax cost of debt to athens : The Athens Airline Company has consulted with its investment bankers and determined that they could issue new debt with a yield of 8%. If Athens' marginal tax rate is 40%, what is the after-tax cost of debt to Athens?
Discuss the impact of the number of samples : Discuss the impact of the number of samples (N) on the probability detection and the threshold value given in Equations (10.14) and (10.15), respectively.
Total amount of money taken by the family business : Ade has utility function U(X) = X2 ,  Bode has utility function U(X) , Clement has utility function U(X) = X4/5, Diran has utility function U(X) = X1/2, Effiong has utility function U(X) = X1/4, where X is the total amount of money taken by the famil..
Owner of an american based small business : Scenario: Jim Logan, the owner of an American based small business, Sports Exports, Inc., specializes in exporting footballs to Great Britain. In return, he receives payments in British pounds every month which need to be converted into dollars.
Draw the hierarchy chart for this program : Design the output for this program; create either sample output or a print chart.
Determine optimal solution to modernization : Formulate a binary (0-1 integer) programming model that could be used to determine the optimal solution to the modernization question facing management. Solve the model formulated in part a) and provide a recommendation for management
What criteria would be important in selecting employees : What factors (individual, work, and organizational) contributed to Fred and Jenny's lack of adjustment to Japan? What mistakes did Fred make because of his lack of understanding of Japan?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Rate of inflation using money supply and real gdp

If velocity is unchanged and the money supply grows by 13% and the real GDP grows by 4%, what is the rate of inflation?

  Characteristics of firms in oligopoly

Testifying at a price fixing trial involving Cargill Corp. and the market for chicken growth hormone, (in which the Cargill is one of only three firms worldwide), an executive for Perdue said

  What is the followers reaction function

The inverse demand for a homogeneous-product Stackelberg duopoly is P = 16,000 - 4Q. The cost structures for the leader and the follower, respectively, are CL(QL) = 4,000QL and CF (QF) = 6,000QF. a. What is the follower's reaction function

  Derive equations for the law of motion of capital per worker

The government finances its purchases through lump-sum taxes on consumers, where T denotes total taxes, and the government budget is balanced every period, so that G = T. The solution for steady state capital per worker k.

  What must be able to do to capture the value

If a firm has created value is it also always able to capture that value How does a firm create value and then what must it be able to do to capture that value In your answer provide an example of a firm that has been able to create value.

  What is the shutdown rule for a perfectly competitive firm

Can you see why, if price is set by the market, and the firm's marginal cost curve slopes up as a function of quantity, this rule tells the firm which quantity to produce in order to maximize profits. What is the shutdown rule for a perfectly compe..

  Command-and-control policy might the landlord impose

a. What is the externality here? b. What command-and-control policy might the landlord impose? Could such a policy lead to an inefficient outcome?

  Operating at full employment equilibrium

Consider an economy that is operating at full employment equilibrium. Graphically illustrate the effect of an increase in government spending (G) on the price level and the level of GDP in the short run.

  Can we conclude that the market demand for x slopes upward

Following are observations on the market price and the quantity of good X produced and consumed in three different years: $10 and 100 units, $4 and 57 units, and $8 and 88 units. Can we conclude that the market demand for X slopes upward?

  Why a coffeehouse face a downward-sloping demand curve

while a dairy farmer has a horizontal demand curve? What other suppliers might face a downward-sloping demand curve and what implications does this have for their advertising budget as compared to suppliers with horizontal demand curves?

  The issue of having insufficient variation in prices

the issue of separating out the effects of price on the quantity demanded when supply cannot be not held constant. the issue of having insufficient variation in prices.

  You have been hired by nobody state university nsu as a

you have been hired by nobody state university nsu as a consultant to help the university with how to increase their

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd