correct Question 19 Imagine your utility is given by In(w), where w is the amount of wealth you have and "In" is the natural log function. You are offered the following game: a dealer will flip a fair coin. If it lands on heads, you will get $247, but if lands on tails, you will get $57. What is the most that you would be willing to pay to play this game? Hint: Think about the certainty equivalent. Enter your answer with one decimal point and NO dollar signs or commas (i.e., 30.4, not $30.38). The question will allow for slight rounding errors. 94.5

correct Question 19 Imagine your utility is given by In(w), where w is the amount of wealth you have and "In" is the natural log function. You are offered the following game: a dealer will flip a fair coin. If it lands on heads, you will get $247, but if lands on tails, you will get $57. What is the most that you would be willing to pay to play this game? Hint: Think about the certainty equivalent. Enter your answer with one decimal point and NO dollar signs or commas (i.e., 30.4, not $30.38). The question will allow for slight rounding errors. 94.5

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 5E

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