EBK ECONOMICS
13th Edition
ISBN: 8220106799642
Author: PARKIN
Publisher: PEARSON
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Chapter 20, Problem 10APA
To determine
Identify whether J and K choose the painting job or not.
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John owns and runs a food truck, which he expects to increase his wealth to $40,000 this year. John knows that every year, there
is a 20% chance that his truck will be firebombed by one of his ruthless food truck competitors. If this happens, he will face a bill
of $10,000 in repairs and lost income. John can choose to get insurance to cover all repair costs and lost wealth. Use this
information and the information in the table and graph to answer the questions.
Total utility
Wealth
Total utility (utils)
730
1000
$32,000
900
$34,000
755
800
700
$36,000
785
600
792
500
$38,000
400
300
200
100
0
$5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000
Wealth
What is John's expected wealth?
expected wealth: $
What is the price for John's insurance?
price of insurance: $
What is John's expected utility without insurance?
expected utility: 730
If John chooses to pay the insurance policy price, what would
be his total utility?
total utility:
1030
42000
10000
utils
utils
persoanility type: https://www.16personalities.com/esfp-strengths-and-weaknesses
1. identify which strength of this personality type, you think will be beneficial for an entrepreneur. Explain why you think these strengths are benficial for entrepreneurship
If a savings account pays 7% interest, then according to the rule of 70 how long will it take for the account balance to double?
A company has an investment project that will cost $2 million today and yield a payoff of $3 million in 5 years. If the interest rate is 7%, should the firm undertake the project? Show evidence to support your answer.
A company has an investment project that will cost $2 million today and yield a payoff of $3 million in 5 years. If the interest rate is 9%, should the firm undertake the project? Show evidence to support your answer.
Chapter 20 Solutions
EBK ECONOMICS
Ch. 20.1 - Prob. 1RQCh. 20.1 - Prob. 2RQCh. 20.1 - Prob. 3RQCh. 20.1 - Prob. 4RQCh. 20.2 - Prob. 1RQCh. 20.2 - Prob. 2RQCh. 20.2 - Prob. 3RQCh. 20.2 - Prob. 4RQCh. 20.3 - Prob. 1RQCh. 20.3 - Prob. 2RQ
Ch. 20.3 - Prob. 3RQCh. 20.3 - Prob. 4RQCh. 20.4 - Prob. 1RQCh. 20.4 - Prob. 2RQCh. 20.4 - Prob. 3RQCh. 20 - Prob. 1SPACh. 20 - Prob. 2SPACh. 20 - Prob. 3SPACh. 20 - Prob. 4SPACh. 20 - Prob. 5SPACh. 20 - Prob. 6SPACh. 20 - Prob. 7APACh. 20 - Prob. 8APACh. 20 - Prob. 9APACh. 20 - Prob. 10APACh. 20 - Prob. 11APACh. 20 - Prob. 12APACh. 20 - Prob. 13APACh. 20 - Prob. 14APACh. 20 - Prob. 15APACh. 20 - Prob. 16APACh. 20 - Prob. 17APACh. 20 - Prob. 18APACh. 20 - Prob. 19APACh. 20 - Prob. 20APACh. 20 - Prob. 21APACh. 20 - Prob. 22APACh. 20 - Prob. 23APA
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