A person with natural logarithmic utility (ln function) has current net wealth of $50 and is also

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A person with natural logarithmic utility (ln function) has current net wealth of $50 and is also given a lottery ticket that pays $20 20% of the time and $0 80% of the time.

What is the minimum price this person would accept to sell their lottery ticket?

Related Book For answer-question

Microeconomics and Behavior

ISBN: 978-0078021695

9th edition

Authors: Robert Frank

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Posted Date: May 02, 2023 06:20 AM

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A person with natural logarithmic utility (ln function) has current net wealth of $50 and is also

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Solution The utility function of the person can be represented as UW lnW Where W is the persons wealth The expected utility of having the lottery tick... View the full answer

Microeconomics and Behavior

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