Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by...

 

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Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No Clarence Bunsen is an expected utility maximizer. His preferences among contingent commodity bundles are represented by the expected utility function: u(C1, c2) = Tiyci+ 72yc2 Clarence's friend, Peter Carson, has offered to bet him $200 on the outcome of the toss of a coin. That is, if the coin comes up heads, Peter must pay Clarence $200, and if the coin comes up tails, Clarence must pay Peter $200. The coin is a fair coin, so that the probability of heads and the probability of tails are both. If he does not accept the bet, Clarence will have $10,000 with certainty. In the privacy of his car dealership office over at Bunsen Motors, Clarence is making his decision. Let Event 1 be "coin comes up heads" and let Event 2 be "coin comes up tails." If Clarence accepts the bet, what amount will he have in case of Event 1? Enter your answer as a number (no $, no commas, example: 50000) Enter your answer here Q2 1 Point What is Clarence's expected utility if he accepts the bet? Round your answer to 2 decimal places (example: 0.10) Enter your answer here Q3 1 Point What is Clarence's expected utility if he does not accept the bet? Enter your answer here Q4 1 Point Does Clarence take the bet? O Yes O No Q5 2 Points Now assume that everything is the same as in Q1 except that if Clarence does not accept the bet, he will have $2,000 with certainty. Does Clarence take the bet now? O Yes O No

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