For questions 39-43, suppose that two such farmers form a group and borrow from the bank...
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For questions 39-43, suppose that two such farmers form a group and borrow from the bank with joint liability. Assume that farmers act in unison so as to maximize their joint expected payoff. Question 39 (2 points) For a given repayment, R, what is the expected joint income of the farmers if they incur the cost to learn the proper fertilizer use? 360 - 2R 440 - 2R 400-2R 320 - 2R Saved Question 40 (3 points) If they choose not to learn, what is the probability that they will repay what they owe in full? 0.84 0.25 0.5625 0.16 Question 41 (3 points) What is their joint expected payoff if they don't learn? 67.2 0.32R 110 0.5R 80 – 0.32R 96 - 0.32R Question 42 (3 points) ** What is the maximum repayment, R that the bank could charge while still inducing the farmers to learn about fertilizer use? ** R = OR** OR** OR** = 193.33 = 167 = 204.76 150.48 9 Question 43 (3 points) What is the expected payoff of the bank when R = R**? 23.67 20.48 16.67 35.76 For questions 39-43, suppose that two such farmers form a group and borrow from the bank with joint liability. Assume that farmers act in unison so as to maximize their joint expected payoff. Question 39 (2 points) For a given repayment, R, what is the expected joint income of the farmers if they incur the cost to learn the proper fertilizer use? 360 - 2R 440 - 2R 400-2R 320 - 2R Saved Question 40 (3 points) If they choose not to learn, what is the probability that they will repay what they owe in full? 0.84 0.25 0.5625 0.16 Question 41 (3 points) What is their joint expected payoff if they don't learn? 67.2 0.32R 110 0.5R 80 – 0.32R 96 - 0.32R Question 42 (3 points) ** What is the maximum repayment, R that the bank could charge while still inducing the farmers to learn about fertilizer use? ** R = OR** OR** OR** = 193.33 = 167 = 204.76 150.48 9 Question 43 (3 points) What is the expected payoff of the bank when R = R**? 23.67 20.48 16.67 35.76
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