User Account

All Pages

What is mia''s expected utility

Assignment Help Microeconomics
Reference no: EM13982846

1. Mia Dribble has a utility function u=W^(2/3). Mia is a basketball star starting her senior year. If she makes it through her senior year without a serious injury, she will receive a $8,000,000 contract for playing in the new professional women's basketball league ( the $8,000,000 includes endorsements). If she injures herself, she will receive a $64,000 contract for selling concessions at the basketball arena. There is a 20 percent chance that Mia will injure herself badly enough to end her career.

a) What is Mia's expected utility? What is the expected value and the variance of her income?

b) What is Mia's risk premium?

c) Suppose that Mia; is offered an insurance policy at the rate p=0.25 How much of insurance would Mia buy?

Reference no: EM13982846

Questions Cloud

Out of bounds when the process is in control : Assuming a normal distribution of item values, what percentage of values would you expect to be out of bounds when the process is in control? Accordingly, how would you de?ne "too many"? What do you think is the rationale for this practice?
How much of insurance would mia buy : (i) What is Mia's expected utility? What is the expected value and the variance of her income? (ii) What is Mia's risk premium? (iii) Suppose that Mia; is offered an insurance policy at the rate p=0.25 How much of insurance would Mia buy?
Paying particular attention to the ethical implications : Required: Write a report addressing the parameters included in the 415 Ethics Rubrics, paying particular attention to the ethical implications of this situation. Come to a conclusion as to what you should do
Probability bounds on the number of people : For reservation purposes, the agency's management wants to ?nd the number of people such that the probability is 0.85 that at least that many people will sign up. It also needs 0.80 probability bounds on the number of people who will sign up for t..
What is mia''s expected utility : 1. Mia Dribble has a utility function u=W^(2/3). Mia is a basketball star starting her senior year. If she makes it through her senior year without a serious injury, she will receive a $8,000,000 contract for playing in the new professional women's b..
All alternatioves are equally acceptable : For the cash flows shown, use an annual worth comparison and an interest rate of 10% per year. Determine the alternative that is economically best. Determine the first cost required for each of the two alternaqtives not selected in (a) so that all al..
Estimate velocity of compressional wave in homogeneous rock : Estimate the velocity of a compressional wave in a homogeneous rock layer with a density of 2.75 g/cm3, a Young's modulus of 0.39 x 1011 N/m2, and a Poisson's ratio of 0.10.
Why in the long run an increase in the saving rate raises : Why in the long run an increase in the saving rate raises productivity but its growth rate is unchanged?
Diagram the strategies players and compute payoffs : Describe some interaction your company has with another entity (firms producing complementary or substitute products, upstream suppliers, or downstream customers), or between internal divisions within your firm that can be described as a sequential o..

Reviews

Write a Review

Microeconomics Questions & Answers

  If market is taken over by monopolist what price and output

the cost and demand schedules for a market are given

  Why no long-term contracts would be allowed

You have been put in charge of electricity restructuring on the Isle of Mann. As part of the restructuring plan, it has been suggested to you that all wholesale electricity should be sold on the spot market at a price that is set every single min..

  Firm simply charge a price that always exceeds its cost

Since a monopolist has some discretion over the price of its product, how is it possible for this firm ever to experience a short run loss? specifically, why can’t the firm simply charge a price that always exceeds its cost?

  What compensation options are available to employers

What compensation options are available to employers?  Describe each.  Many have argued that the most important reason for adopting incentive compensation is to communicate to employees how they contribute to the company's success.  Do you agree or d..

  What is the price of the product

A manufacturing company leases the machine for $31,000 per year. Each unit produced cost of $36.77 in labor and $60.02 in materials. To breakeven 21,000 units should be sold. What is the price of the product? Provide answer with precision to cents.

  Calculate the point price elasticity of demand for the firms

Wonder bread is a normal good produced by the Wonder Bakery. Using clearly labeled Demand and Supply curves, show what will happen to the equilibrium price and quantity of Wonder bread in each of the following situations?

  What feature of ppf illustrates increasing opportunity cost

If Yucatan produces 150 pounds of food per month, how much sunscreen must it produce if it achieves production efficiency? What is Yucatan's opportunity cost of producing 1 pound of food?

  Difference between accounting and economic profit

What is the law of diminishing returns? Can you provide an example of when diminishing returns have set in (could set in) at a work place?

  Full amount withdrawn is treated as income and is taxed at

Individual retirement accounts, or IRAs, were established by the U.S. government to encourage saving. An individual who deposits part of current earnings in an IRA does not have to pay income taxes on the earnings deposited, nor are any income taxes ..

  Find what happens to other countrys payoff if it decides

suppose two entities are considering collusion - to make things legal consider a situation similar to opec except

  How would you treat possible future costs of lawsuit which

in calculating the incremental cost of a particular project how would you treat the possible future costs of a lawsuit

  Why was 40 percent discount offered only after the rejection

"I see that your shoes are ‘buy one, get one free - limit one free pair per customer.' Will you sell me one pair for half-price" The clerk answered, "I can't do that." When the customer started to leave the store, the clerk hastily offered,

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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