If a person is highly risk averse, the higher marginal utility associated with a negative outcome outweighs the lower marginal utility from a positive outcome.
<h3>What is marginal utility?</h3>
The extra satisfaction which a consumer receives from possessing one more unit of an item or service is known as marginal utility.
The concept of marginal utility is helps in describing how customers make decisions to get the most out of their limited budgets. In general, until the marginal utility exceeds the marginal cost, consumers will keep buying more of a good.
There are three types of Marginal utility:
- Positive Marginal Utility: When having more of something provides you more happiness, you have positive marginal utility. Assume you regularly eat a piece of cake, however a second piece would bring you even more joy. Then the marginal utility from cake consumption is positive.
- Zero Marginal Utility: It occurs when using more of an item provides no additional measure of satisfaction. For instance, you might feel reasonably full after 2 pieces of cake but not significantly better after a third slice. Your marginal utility on eating cake is 0 in this situation.
- Negative Marginal Utility: It occurs when you have an abundance of an item, and ingesting more is really hazardous. After eating three slices of cake, the fourth piece of cake may potentially make you sick.
To know more about Marginal utility, check out:
brainly.com/question/15050855
#SPJ4
Answer:
$8 million
Explanation:
There are total 4 sources involved.
But the government grants are reduced from the cost of the the project. It is not recorded as other financing sources.
Also the earnings from bond proceeds shall not be considered for the other financing sources, as that is mere use of income.
Use of general fund in these capital projects will account for such other financing sources.
Cash received from issue of bonds for this project will also account for such capital fund.
Thus, total other financing sources = $1 million + $7 million = $8 million
The element that Valerie's boss is trying to eliminate by telling her to be more accurate is <u>Miscalculations</u>.
<h3>What happens when we aren't accurate?
</h3>
Accuracy in writing means that the things written are factual and correct and devoid of mistakes.
If Valerie's boss believes that Valerie should be more accurate, it means that she is trying to eliminate any mistakes and miscalculations that may have been made.
Find out more on the accuracy at brainly.com/question/5792909.
A collateralized debt obligation (CDO) pays out cash flows from a collection of assets in different tranches, with the highest.
Structured asset-backed security (CDO) is a type of collateralized debt obligation (CDO). CDOs were initially designed as corporate debt market instruments, but from 2002 they were used to refinance mortgage-backed securities. A CDO can be viewed as a promise to pay investors in a specified order based on the cash flow it receives from the pool of bonds or other assets it holds, similar to other private label securities backed by assets.
In contrast, the probability of default (PD) for CDOs is often calculated using bond or asset ratings. A pool of loans and other assets serves as the collateral for the intricately designed financial product known as a collateralized debt obligation.
If the loan defaults, the underlying assets act as collateral. CDOs are a practical tool for transferring risk and freeing up resources while being risky and not suitable for all investors.
Learn more about collateralized debt obligation here:
brainly.com/question/24157864
#SPJ4
Answer:
<h2>The answers in this case would be options A. B. and D.</h2>
Explanation:
- In Microeconomics or Production Economics,economies of scale refers to a phenomenon under which any firm or company is able to reduce or control its per unit cost of production or the average cost of production and increase the overall production or output level simultaneously.
- Natural monopolies can arise due to consistent economies of scale.As any firm or company is able to consistently reduce or control its average cost of production as the production or output level expands,it can obtain a significant competitive or cost advantage in the market over its market counterparts or rivals.Hence,successful and consistent exploitation of economies of scale can eventually give rise to natural monopolies.
- Any monopoly firm or company produces the output level at which the marginal revenue or the additional or incremental revenue obtained from selling one more unit of the output is equal to the additional or incremental cost incurred to produce that 1 more unit of output or the marginal cost.This output level is the profit maximizing output of any monopoly.Therefore,natural monopolies also produce the output level and charge per unit output price which correspond to the equality between marginal revenue and marginal cost of production.
