table (see below), and support your final statement with areason.Be sure to show all work, indicate the recommended alternativeeach time, provide a summary table (see below),and support your final statement with a reason.Expected Table Format: See bellowDMUU:Letter/ValueReasonPerfect Optimism:Perfect PessimismOptimismat a=Equal Likelihood:Minimizing Regret:Overall Choice/ Reason: ALTERNATIVESFiVLreason.Portfolio UPortfolio VPortfolioWRecession$25$ 47$50.3Inflation$75$ 70$ 80TES OF NATUREDepressionSTA$0$-5$-15.21. DMUU: What would be the decision accordingto: (1) Maximax (optimism); (2) Maximin (pessímísm); (3) Realism where Alpha - α = .7 (4) Equal Likelihood;and (5) Minimizing Regret? Be sure to show work, indicatethe recommended alternative each time, provide a summary.table_(see below), and support your final statement with aBe sure to show all work, indicate the recommended alternativeeach time, provide a summary table (see below),and support your final statement with a reason.

NOTE: “Since you have posted a question with multiple sub-parts, we will solve the first three…

ALTERNA TIVES Fi VL Portfolio U Portfolio V Portfolio W Recessi on $25 $ 47 $50 .3 n Inflatio Depressi $75 $ 70 $80 TES OF N 5 ATURE on $0 $-5 $ 15 - .2 1. DMUU: What would be the decision according to: (1) Maximax (optímísm); (2) Maximin (pessimism); (3) R ealism where Alpha - α = .7 (4) Equal Likelihood; and (5) Minimizing Regret? Be sure to show work, indicate the recommended alternative each time, provide a summary table (see below), and support your final statement with a

ALTERNA TIVES Fi VL Portfolio U Portfolio V Portfolio W Recessi on $25 $ 47 $50 .3 n Inflatio Depressi $75 $ 70 $80 TES OF N 5 ATURE on $0 $-5 $ 15 - .2 1. DMUU: What would be the decision according to: (1) Maximax (optímísm); (2) Maximin (pessimism); (3) R ealism where Alpha - α = .7 (4) Equal Likelihood; and (5) Minimizing Regret? Be sure to show work, indicate the recommended alternative each time, provide a summary table (see below), and support your final statement with a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Saved to this PC V ut References A A Aa x² A a. b. C. O Search (Alt+Q) Mailings Review View Help Du A A EEE ΕΞ ΑΙ ¶ ↓ E- Paragraph LO Value of first donut Value of second donut Value of third donut Value of fourth donut Value of fifth donut Value of sixth donut S Normal Problem 1 Tammy loves donuts. The table shown reflects the value Tammy places on each donut she eats: $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 If the price of donuts is $0.20, how-many donuts will Tammy buy? Why? Body Text How much consumer surplus would she have at a price of $0.20? Styles m If the price of donuts rose to $0.40, how many donuts would she purchase now? What would happen to Tammy's consumer surplus?
Price elasticity measures the responsiveness of the quantity demanded or supplied to a good to a change in its price. Note: Select an option True False er than the Save Answer button will NOT save any changes to your answers!
EXERCISE 1Below is a production possibilities table for consumer goods (Food) and capital goods(Robots):A B C D EFood 0 1 2 3 4Robots 10 9 7 4 01. Show these data graphically. Upon what specific assumptions is this productionpossibilities curve based?2. If the economy is at point C, what is the cost of one more food? Of one morerobot? Explain how the production possibilities curve reflects the law ofincreasing opportunity costs.3. If the economy characterized by this production possibilities table and curvewere producing 3 food and 2 robots, what could you conclude about its use ofavailable resources?4. What would production at a point outside the production possibilities curveindicate? What must occur before the economy can attain such a level ofproduction?EXERCISE 2Explain how (if at all) each of the following affects the location of a country’s productionpossibilities curve:1. The quality of education increases.2. The number of unemployed workers increases.3. A new technique…
Answer both. Otherwise Dounvote
3. What are the benefits to make rational decision?
12. Do it asap!
a Suppose you are given a choice between thefollowing options:A1: Win $30 for sureA2: 80% chance of winning $45 and 20% chance ofA2: winning nothing B1: 25% chance of winning $30B2: 20% chance of winning $45Most people prefer A1 to A2 and B2 to B1. Explainwhy this behavior violates the assumption that decisionmakers maximize expected utility.b Now suppose you play the following game: You havea 75% chance of winning nothing and a 25% chance ofplaying the second stage of the game. If you reach thesecond stage, you have a choice of two options (C1 andC2), but your choice must be made now, before youreach the second stage.C1: Win $30 for sureC2: 80% chance of winning $45 13.5 Bayes’ Rule and Decision Trees 767Most people choose C1 over C2 and B2 to B1 (from part(a)). Explain why this again violates the assumption ofexpected utility maximization. Tversky and Kahneman(1981) speculate that most people are attracted to thesure $30 in the second stage, even though the secondstage may never be…
Multiple Choice O O Fto point D. B to point A. C to point B. H to point /.
Suppose there is a 50–50 chance that a risk-averse individual with a current wealth of $20,000 will contract a debilitating disease and suffer a loss of $10,000. a. Calculate the cost of actuarially fair insurance in this situation and use a utility-of-wealth graph (such as shown in Figure 7.1) to show that the individual will prefer fair insurance against this loss to accepting the gamble uninsured. b. Suppose two types of insurance policies were available: (1) a fair policy covering the complete loss; and (2) a fair policy covering only half of any loss incurred. Calculate the cost of the second type of policy and show that the individual will generally regard it as inferior to the first. Reference: Figure 7.1
d. Use expected utility to make a recommended decision. e. Should the decision maker feel comfortable with the final decision recommended by the analysis?
You and a coworker are assigned a team project on which your likelihood or a promotion will be decidedon. It is now the night before the project is due and neither has yet to start it. You both want toreceive a promotion next year, but you both also want to go to your company’s holiday party that night.Each of you wants to maximize his or her own happiness (likelihood of a promotion and mingling withyour colleagues “on the company’s dime”). If you both work, you deliver an outstanding presentation.If you both go to the party, your presentation is mediocre. If one parties and the other works, yourpresentation is above average. Partying increases happiness by 25 units. Working on the project addszero units to happiness. Happiness is also affected by your chance of a promotion, which is depends on howgood your project is. An outstanding presentation gives 40 units of happiness to each of you; an aboveaverage presentation gives 30 units of happiness; a mediocre presentation gives 10 units…
Becky is deciding whether to purchase an insurance for her home againtst burglary. the payoff for her is shown as follow: Net worth of her Net worth of her home: $ 20000 burglary(10%) Net worth of her Net worth of her home: $50000 burglary (90%) The insueance would cover all the loss from burlary and the insurance fee is $8000. Her utility funtion is given as u=w ^0.3 Should Beck purchase the insurance Explain.