PLS ANS 7 URGENT    H = ($100, 0.4; $200, 0.6) K = ($120,p, $300, 1- p) 6. EV(H) =EV(K) What value of p makes this statement true? 7. Carol owns prospect H and is interested in selling it. Her utility of wealth function is given by u(x) = x^0.5 . What is the lowest price for which Carol would be willing to sell prospect H?

Suppose the Super Bowl is this week, and Raphael is in need of a television to watch the big game. As a college student, Raphael knows that he can either buy his flat-screen television at the local electronics store, or he can shop online for a better deal but have to wait four days for the television to arrive. The following problem uses the economic concept of rate of time preference to help determine which decision is better for Raphael. Throughout the question, assume that Raphael pays for the good the day he buys it, so his wealth is affected in the initial time period no matter where he buys the good. Also, assume the shipping cost and cost to travel to the store are incorporated into their respective given prices. Finally, assume the goods are identical, and there's no cost to gaining information about prices-in other words, he knows the best price online and in the store without having to search. Suppose Raphael receives a utility of 35.11 utils once he actually receives his…

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Consider the lottery that assigns a probability T of obtaining a level of consumption CH and a probability 1-T an individual facing such a lottery with utility function u(c) that has the properties that more is better (that is, a strictly positive marginal utility of consumption at all levels of c) and diminishing marginal utility of consumption, u"(c) CL. Consider du(c) for the first derivative of the utility function with respect to dc du(c) du' (c) consumption and u"(c) (which is also the derivative of the first derivative of the utility function). to be the second derivative of the utility function dc dc2 1. Provide a definition for the certainty equivalent level of consumption for the simple lottery described above.