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sesenic [268]
4 years ago
7

g Bob's farm harvests corns worth 83 thousand dollars (and nothing else). In each year, there is a 38% chance that a storm will

attack and leaves him with only 20 thousand dollars worth of the corns. Bob's preferences over wealth are represented by U=\ln{w} . What is the maximum that Bob is willing to pay for full insurance (in unit of thousand dollars)?
Mathematics
1 answer:
vampirchik [111]4 years ago
7 0

Answer:

Hence Bob will pay a maximum of 35 thousand dollars for the insurance.

Step-by-step explanation:

The expected Utility for Bob is given by:  

wealth w is measured in thousands of dollars

E(U) = Probability of storm * Utility if storm happens + (1- Probability of storm) * Utility if there is no storm)

E(U) = 0.38 * ln(20) + 0.62 * ln(83)

=0.38 * 2.9957 + 0.62 * 4.4188

=1.138378 + 2.73968

=3.878059

≅3.88

E(U) = 3.88

The wealth corresponding to this expected utility is given by w = exp(E(U)) = exp(3.88) = 48.33

≅48

= 48 dollars.

Hence the maximum Bob is willing to pay for the insurance can be given by = 83- 48

= 35  dollars.

<u>Since it in unit of thousand dollars</u>

<u />

Hence Bob will pay a maximum of 35 thousand dollars for the insurance.

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I need help asap please help me
Igoryamba

Answer:

8

Step-by-step explanation:

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hope this helped

4 0
1 year ago
The base of a box is a rectangle. The width of the box is half its length. The height of the box is 0.5m. Find the volume of the
Vanyuwa [196]

We assume the box is open-top.

If the width of the box is represented by w, then its length is 2w. The area of the base is then w·2w = 2w².

The combined area of the sides is the product of the perimeter of the base, 2(w+2w) = 6w and the height, 0.5, so is 3w.

Since the base area is 1.08 m² less than the lateral area, we have ...

... 2w² = 3w -1.08

... 2w² -3w +1.08 = 0 . . . . rearrange to standard form

... w² -1.5w +0.54 = 0 . . . make the leading coefficient 1 (divide by 2)

... (w -0.9)(w -0.6) = 0 . . . factor

The width of the box may be either 0.6 meters or 0.9 meters.

The volume is the product of width, length, and height, so is ...

... V = w·2w·0.5 = w²

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_____

<em>Check</em>

For width 0.6 m, the length is 1.2 m and the perimeter is 2(0.6+1.2) = 3.6 m. The lateral area is then (0.5 m)(3.6 m) = 1.8 m². Subtracting 1.08 m² from this, we get 0.72 m². The area of the base is (0.6 m)(1.2 m) = 0.72 m², so this answer checks.

For width 0.9 m, the length is 1.8 m and the perimeter is 2(0.9+1.8) = 5.4 m. The lateral area is then (0.5m)(5.4 m) = 2.7 m². Subtracting 1.08 m² from this, we get 1.62 m². The area of the base is (0.9 m)(1.8 m) = 1.62 m², so this answer checks, too.

7 0
3 years ago
Please help meeeeeeeeee​
amid [387]

Answer:

20% i believe

Step-by-step explanation:

i looked it up actually lol

5 0
3 years ago
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The ratio of red cars to blue cars in a parking lot was 5:3.if there were 40 red cars, how many blue cars were there??
Afina-wow [57]

Every 5 red cars there are 3 Blue cars,

So if there are 40 red cars,

there are going to be 24 Blue cars

40 divided by 5 which is 8

Multiply 3 × 8 which is ( 24 blue cars )

8 0
3 years ago
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Evaluate the expression when c=2 and y = -7<br><br> -9y+c
CaHeK987 [17]

-9y+c  -9(-7) + 2 = 63 + 2 = 65

3 0
4 years ago
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