Suppose a family has saved enough for a 10 day vacation (the only one they will be able to take for 10 years) and has a utility function U = V1/2 (where V is the number of healthy vacation days they experience). Suppose they are not a particularly healthy family and the probability that someone will have a vacation ruining illness (V = 0) is 30%. What is the expected value of V?
a. 10
b. 7
c. 3
d. 0
b
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A A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate?country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10
million are working full time. What is this country's unemployment rate? What will be an ideal response?
What assumptions are made to create a model to determine short-run changes in exchange rates using the asset approach?
a. Prices are completely flexible. b. In the long run, money is neutral. c. Prices are sticky, yet nominal interest rates are flexible. d. Prices and nominal interest rates are sticky.
Briefly explain what public choice theorists believe about the role of self interest in economics and politics.
What will be an ideal response?
Borrowing money from other countries is rarely a good idea
Indicate whether the statement is true or false