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MAXImum [283]
2 years ago
5

Draw a utility function over income u( I) that describes a man who is a risk lover when his income is low but risk averse when h

is income is high. Can you explain why such a utility function might reasonably describe a person’s preferences?

Business
1 answer:
AysviL [449]2 years ago
6 0

Answer:

Suppose there is an individual who needs a certain level of income, I°, in order to stay alive.  An increase in income above that level of income I° will have a diminishing marginal utility.  Below I°, the individual will be a risk lover and will take unfair gambles and risks in an effort to make large gains in income. Above I°, the individual will purchase insurance against losses.

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Even if you are willing to take on more responsibility, you need to make sure that ______. a. you do not take on too much b. you
pentagon [3]
Tricky tricky. I'll go with 'A. you do not take too much' from experience.
4 0
3 years ago
Read 2 more answers
A company incurs advertising costs of $10,000. The company's three selling departments have the following sales: Department 1—$1
erik [133]

Answer:

The amount of advertising allocated to:

Department 1: $1,250

Department 2: $3,750

Department 3: $5,000

Explanation:

Total sales of the company = Sales of Department 1 + Sales of Department 2 + Sales of Department 3 = $10,000 + $30,000 + $40,000 = $80,000

Percent of sales of three selling departments:

Department 1 = ($10,000/$80,000)x100% = 12.5%

Department 2 = ($30,000/$80,000)x100% = 37.5%

Department 3 = ($40,000/$80,000)x100% = 50%

Advertising is allocated based on percent of sales. The amount of advertising allocated to:

Department 1 = 12.5% x $10,000 = $1,250

Department 2 = 37.5% x $10,000 = $3,750

Department 3 = 50% x $10,000 = $5,000

5 0
3 years ago
{The following information applies to the questions displayed be/ow. Fighting Irish Incorporated pays its employees $3,220 every
matrenka [14]

Answer: $690

Explanation:

The 2018 year- end adjusted balance of Salaries Payable will be calculated as:

= January 1, 2018 balance + Adjustment on December 31, 2018

= $0 + $690

= $690

Note: Salaries accrued at December 31, 2018 will be:

= (Number of days from December 29 - 31) × Salary per day

= 3 × $230

= $690

Therefore, the balance on salaries payable is $690

6 0
2 years ago
The following amounts are reported in the ledger of Mariah Company: Assets $ 78,000 Liabilities 41,000 Retained Earnings 9,000 W
Serjik [45]

Answer:

47000

Explanation:

4 0
2 years ago
Lean production should result in reduced inventories. If lean production is successfully implemented, the difference in net oper
harina [27]

Answer:

True

Explanation:

If lean production totally eliminates inventories, the net operating income computed under the absorption and variable costing methods should be equal.  If lean production only reduces inventories, then the difference in net operating income under the two methods will be reduced.

Lean production is a system of production that tries to eliminate bottlenecks in the flow of goods by employing tools like just in time (JIT), Kaizen, and the 5S of Sort, Set in Order, Shine, Standardize, and Sustain, among others.  It attempts to cut costs, reduce unnecessary inventory, shorten production cycle, speed response time, grant employees autonomy,  and reduce waste of resources while ensuring high quality and customer satisfaction.

Lean production employs some principles in order to achieve efficiency.  They are: 1) definition of value, 2) mapping the value stream, 3) creating efficient flow, 4) using a pull system, and 5) pursuing perfection in all aspect of production activities.  The Lean approach can be applied to services and other aspect of business, like system, structure, and organization.

3 0
3 years ago
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