Andrew's utility of wealth schedule is given in the above table. Andrew is offered a job as a cook which pays $10,000. He is also offered a job as a server which will pay $5,000 if tips are poor and $15,000 if tips are good
There is a 50 percent chance that tips will be poor and a 50 percent chance that tips will be good. The expected income from the job as a cook is ________ and from the job as a server is ________. A) $10,000; $15,000
B) $5,000; $5,000
C) $10,000; $5,000
D) $10,000; $10,000
D
You might also like to view...
A production possibilities frontier shows
A) the various combinations of output a nation can produce a certain time, given its available resources and technology. B) the limits to future growth of a nation. C) how money can be allocated among two kinds of goods. D) that if price of one good decreases, the price of the other has to increase. E) that it is impossible to produce inefficiently.
Explain how comparing two-earner and one-earner households can be used to illustrate the problem of using money income as a measure of well-being
What will be an ideal response?
Assume that autonomous consumption equals $200 and that the mpc equals 0.8. If disposable income equals $1000, then total consumption equals
A) $80. B) $200. C) $800. D) $1000.
For an investment to be considered autonomous, it must
A) be negatively related to the interest rate. B) increase as the level of income increases. C) include fixed components. D) be independent of the level of real disposable income.