Paul is a risk loving decision maker, facing a lottery that yields either zero or 100 pounds with equal probabilities. A friend offers to buy the lottery from Paul at a price of X pounds O a. Paul will agree to sell the lottery if and only if X> 100 Ob. Paul would never sell the lottery because he likes risk Oc Paul may agree to sell the lottery for X< 50 Od. Paul will agree to see the lottery for X = 50 Oe. Paul will agree to sell the lottery only if X> 50

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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QUESTION 6
Paul is a risk loving decision maker, facing a lottery that yields either zero or 100 pounds with equal probabilities. A
O a. Paul will agree to sell the lottery if and only if X> 100
Ob. Paul would never sell the lottery because he likes risk
O. Paul may agree to sell the lottery for X < 50
d. Paul will agree to see the lottery for X = 50
O e. Paul will agree to sell the lottery only if x> 50
Transcribed Image Text:QUESTION 6 Paul is a risk loving decision maker, facing a lottery that yields either zero or 100 pounds with equal probabilities. A O a. Paul will agree to sell the lottery if and only if X> 100 Ob. Paul would never sell the lottery because he likes risk O. Paul may agree to sell the lottery for X < 50 d. Paul will agree to see the lottery for X = 50 O e. Paul will agree to sell the lottery only if x> 50
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