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Reference no: EM131616726

1.) Suppose a project has two possible outcomes. There is a 70% chance that it brings a profit of 10,000. There is a 30% chance that it brings a profit of 4,900. Suppose a decision makers utility function can be described by U(w)=w^0.5. What is this project's certainty equivalence for this decision maker?

2.) If as price decreases by 8 percent, total revenue increases by 5 percent, what is true about demand?

demand is perfectly inelastic

demand is inelastic, but not perfectly inelastic

demand is unit elastic

demand is elastic

Reference no: EM131616726

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