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Jay Boville Corporation is being sued by Lark Dent. Lark Dent can settle out of court and win $40,000 or go to court. If Lark goes to court, there is a 30% chance that she will win the case. If she wins, a small and a large settlement are equally likely. A small settlement nets $50,000 and a large settlement nets $300,000.
a) If Lark is risk-neutral, what should she do?
b) What should Lark due if her utility function for an increase in her cash position is given by .
c) For $10,000 Lark can hire a consultant who will predict who will win the trial. The consultant is correct 90% of the time. Should she hire the consultant? (Assume she is risk neutral). What is EVSI?
d) If Lark is risk neutral what is EVPI?
'The Theory of Individual Behavior', and much of the chapter is devoted to the use of indifference analysis to build a framework for demand theory. Indifference analysis goes to great lengths to explain consumer behavior and how consumers make choice..
q1. a monopolist has demand and cost curves given byqd 10000 - 20ptc 1000 10q .05q2a. find the monopolists
Consider a country with an economic structure consistent with the assumptions of the classical model. Suppose that businesses in this nation suddenly anticipate higher future profitability from investments they undertake today.
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US citizens spend more on iphones/smartphones than the citizens of other countries, yet this type of spending is seldom described as a problem. Why is spending more on healthcare different?
Illustrate what real world factors may affect the stability of our banking system also Illustrate what might Americans do to better understand the importance of this banking sector.
A increase in the expected future domestic exchange rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant.
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