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Q 1. Jerry has wealth of $60 and derives utility from this according to the utility function U(w)=1i, W Where w is his wealth. Jerry
Q 1. Jerry has wealth of $60 and derives utility from this according to the utility function U(w)=1i, W Where w is his wealth. Jerry now nds a lottery ticket (whose drawing is tomorrow) that offers a 50% chance of winning $5, the price of this lottery ticket is $3. a. What is the expected value of the lottery ticket? , . b. = ls Jerry a risk-lover or risk-averse? 0. 'Will Jerry buy this lottery ticket? d.' What is the minimum winning for which Jerry would be willing to buy this lottery ticket
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