Which of the following statements is correct? a.Contingent commodities are goods delivered only if a particular state of the world occurs. b.The key insight offered by state-preference models is to reframe the study of behavior under uncertainty back into a problem of utility maximization subject to a budget constraint (standard choice-theoretic framework). c.Insurance markets are an example of markets for contingent claims. d.All of the above.

a. Correct Contingent commodity is a good that is available only if a particular event (or ‘state…

Answered: Which of the following statements is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following statements is correct?

	a.	Contingent commodities are goods delivered only if a particular state of the world occurs.
	b.	The key insight offered by state-preference models is to reframe the study of behavior under uncertainty back into a problem of utility maximization subject to a budget constraint (standard choice-theoretic framework).
	c.	Insurance markets are an example of markets for contingent claims.
	d.	All of the above.

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