Q) Suppose that utility for a worker is u(w)=w^.5. If the wage (w) offered is $64, there is a 50% chance of being fired, and switching costs are $28. What is the expected utility for the worker?
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Q) Suppose that utility for a worker is u(w)=w^.5. If the wage (w) offered is $64, there is a 50% chance of being fired, and switching costs are $28. What is the expected utility for the worker?
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- The dollar amount that a manager would be just willing to trade for the opportunity to engage in a risky decision is known as , Multiple Choice marginal utility of profit. the certainty equivalent. expected utility of profit. opportunity cost.In a bad economy, a CEO has a 10% chance of meeting earnings estimates at regular effort, and a 15% chance at extraordinary effort. Extraordinary effort costs the CEO $10,000. How large a bonus should the CEO be paid for meeting estimates to encourage extraordinary effort? $10,000 $100,000 $200,000 $250,000 $1,000,000A cleaning company specializes in cleaning floors. Their output is measured in square feet of floor completely cleaned. Employee A can clean 215 ft2 floor per hour and has an hourly wage of $17. Employee B can clean 180 ft2 floor per hour and has an hourly wage of $15. Which employee has a lower marginal cost of producing cleaned floor area for the firm? Group of answer choices a. Cannot determine with the information given b. Employee A c. they have the same MC d. Employee B
- A firm has employed its workers X and Y optimally such that the marginal product of X is 10 bags while that of Y is 15 bags of wheat. If Y’s wage is K750, what is X’s wage? b) Company B has employed 20 workers whose average product is 1000 Kgs of maize. The wage given to each worker is K2000 while the price of each bag is K20. An additional worker produces 2000 but demands a wage of K3000. Should the additional worker be employed? c) Firm A sells its product at K20 while its variable costs is K15 per unit. It can earn K3 per unity accounting profit in its next best alternative. How much should it produce to earn a zero economic profit? d) What will be the economic profit if firm A above produces and sells 4000 units of its productQ) Suppose that utility for a worker is u(w)=w^.5. If the wage (w) offered is $64, there is a 50% chance of being fired, and switching costs are $28. What is the expected utility for the worker? Explain it earlySuppose a college athlete is deciding on when to turn pro (right out of high school, or after 1/2/3/4 years of college). If they go to college, their potential earnings increase by rate r (which is different for every year spent in college). But they have to postpone their earnings by 1 more year and pay discount rate i. What is the general decision rule for staying in school for one more year vs turning pro?
- The compensation principle is stated in terms of potential compensation rather than actual compensation. true or falseQ-3 Are the following statement true of false ? You need to provide an aurgument for and against it why it is so.Suppose a company is hiring graduates from Harvard and Yale and they want to hire people with very high predicted productivity. All they use to predict productivity is where they went to school and their GPA. There is no difference in average true ability between students at Harvard and Yale. However, while Yale GPAs are excellent predictors of performance at this company, Harvard GPAs are not. The company hires very few graduates and the cutoff for expected productivity is well above average. What will be true about the GPA cutoffs for the two schools? A. The cutoff for Harvard will be higher.B. The cutoff for Yale will be higher.C. The cutoffs will be the same.D. There is not enough information to answer this question.
- Consider a gamble/lottery in which a coin is tossed rapidly until a tail comes up. 2m rupee is given if the tail comes up at the mth toss. Let the individual be risk neutral, having u(x) = x where x is the amount of winning. Find the expected utility from the lottery.Multiple Choice A. Yes, because only $77,200 of profit is earned by serving only the daytime buyers. B. Yes, because only $137,200 of profit is earned by serving only the daytime buyers. C. No, because $240,000 of profit is earned by serving only the daytime buyers. D. No, because $300,000 of profit is earned by serving only the daytime buyers.Joe's search costs are $5 per search. He wants to buy a smart watch for his wife for Christmas, and the lowest price he's found so far is $300. Joe thinks 80 percent of the stores charge $300 for smart watches and 20 percent charge $200. Joe's optimal decision is to Multiple Choice continue to search for a lower price since the expected benefit of an additional search is $20, which exceeds his per-unit search costs. continue to search for a lower price since the expected benefit of an additional search is $80, which exceeds his per-unit search costs. stop searching and purchase a video player for $300. continue to search for a lower price since the expected benefit of an additional search is $100, which exceeds his per-unit search costs.