Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help me with this behavioral economics question~! 3. [Rational Inattention] Suppose I surprise you with a final exam in Econ 301 that contains two
Please help me with this behavioral economics question~!
3. [Rational Inattention] Suppose I surprise you with a final exam in Econ 301 that contains two True/False questions. I inform you, truthfully, that there is a 90% chance that the correct answers to the two questions are the same (either both True or both False), and a 10% chance that they are different. The first question is relatively easy, while the second question is quite difficult. Both questions count equally towards your grade. a. Compare the marginal benefits of answering each question correctly. b. Compare the marginal costs of answering each question correctly. c. If you are time-constrained (i.e., with insufficient time to confidently answer both questions correctly), to which question should you devote more time to answering? Why? Base your answer on your conclusions from parts (a) and (b). 3. [Rational Inattention] Suppose I surprise you with a final exam in Econ 301 that contains two True/False questions. I inform you, truthfully, that there is a 90% chance that the correct answers to the two questions are the same (either both True or both False), and a 10% chance that they are different. The first question is relatively easy, while the second question is quite difficult. Both questions count equally towards your grade. a. Compare the marginal benefits of answering each question correctly. b. Compare the marginal costs of answering each question correctly. c. If you are time-constrained (i.e., with insufficient time to confidently answer both questions correctly), to which question should you devote more time to answering? Why? Base your answer on your conclusions from parts (a) and (b)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started