hhhhhhhhhh
Consider the following figure. The blue dot labelled X, Y represents how much X and Y is currently being produced in the economy. Good Y PPF X. Y ICB ICA Good X Which of the following statements are true? This economic is productively efficient only. This economy is productively, distributively, and allocationy efficient. This economy is productively and distributively efficient, but not allocationy efficient. This economy is distributively efficient only.Question 7 (8 points) Consider a two consumer, two good economy Assume that both goods are produced, and that production and consumption are such that MRSA = MRSB > MRTi = MRTi. Given this, which of the following statements is TRUE? 1. The economy satisfies distributive efficiency. Il. The economy satisfies productive efficiency. Ill. Allocation efficiency requires the resources to shift from the production of Y to the production X. Oil only. ONone of the statements are true. Ol and II only. Ol only. OI, 11, and Ill. Question 8 (7 points) oney is given byQuestion 8 (7 points) Fan is an expected utility maximizer and thier utility function over money is given by u = x1/4 Fan has a car that might break down. If it breaks down it will be worth $200. If it doesn't break down it will be worth $1000. If the probability that the car breaks down is 25%, what is the expected value of Fan's car? $800 $600 $850 $750 Not enough information to decide Question 9 (8 points) ility tion is given byNot enough information to decide Question 9 (8 points) A person has a utility function is given by U = (x) 1/4 We know this person is a risk lover and will never buy insurance risk averse and will prefer risk pooling over non-pooled risks a risk lover and may be willing to sell insurance risk averse and will over insure at the fair premium risk neutral and will be willing to take fair bets Question 10 (7 points) cider the following diagram of a utility function. LetQuestion 10 (7 points) Consider the following diagram of a utility function. Let pA + (1 - p)F = E K A B C D ED E F W Select all of the following statements that are true: The point C is the Certainty Equivalent The point E is the Certainty Equivalent This agent would always trade a gamble for its expected value The point B is the expected utility The marginal utility of wealth is decreasing Question 11 (6 points) Consider a expected utility maximizing consumer with preferences represented by u(W ) = w2 If they face a loss that occurs with a 15 % probabilty, (select all that apply)
