tailieunhanh - Bài tập về Kinh tế vĩ mô bằng tiếng Anh - Chương 5

Tham khảo tài liệu 'bài tập về kinh tế vĩ mô bằng tiếng anh - chương 5', kinh tế - quản lý, kinh tế học phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Chapter 5 Uncertainty and Consumer Behavior CHAPTER 5 UNCERTAINTY AND CONSUMER BEHAVIOR EXERCISES 1. Consider a lottery with three possible outcomes 125 will be received with probability .2 100 with probability .3 and 50 with probability .5. a. What is the expected value of the lottery The expected value EV of the lottery is equal to the sum of the returns weighted by their probabilities EV 125 100 50 80. b. What is the variance of the outcomes of the lottery The variance o2 is the sum of the squared deviations from the mean 80 weighted by their probabilities o2 125 - 80 2 100 - 80 2 50 - 80 2 975. c. What would a risk-neutral person pay to play the lottery A risk-neutral person would pay the expected value of the lottery 80. 64 Chapter 5 Uncertainty and Consumer Behavior 2. Suppose you have invested in a new computer company whose profitability depends on 1 whether the . Congress passes a tariff that raises the cost of Japanese computers and 2 whether the . economy grows slowly or quickly. What are the four mutually exclusive states of the world that you should be concerned about The four mutually exclusive states may be represented as Congress passes tariff Congress does not pass tariff Slow growth rate State 1 State 2 Slow growth with tariff Slow growth without tariff Fast growth rate State 3 State 4 Fast growth with tariff Fast growth without tariff 3. Richard is deciding whether to buy a state lottery ticket. Each ticket costs 1 and the probability of the following winning payoffs is given as follows Probability Return a. What is the expected value of Richard s payoff if he buys a lottery ticket What is the variance 65 Chapter 5 Uncertainty and Consumer Behavior The expected value of the lottery is equal to the sum of the returns weighted by their probabilities EV 0 The variance is the sum of the squared deviation from the mean weighted by their probabilities o2 0 - 2 1 -

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