Dan has a car valued at $10,000 that gives him a utility of 50 units. There is a 10 percent chance that he will have an accident that will make his car worthless, in which case his utility will be zero
His utility from a wealth of $7,000 is 45 units. The maximum amount Dan will be willing to pay for car insurance is A) $1,000.
B) $3,000.
C) $7,000.
D) zero.
B
Economics
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If a good is income inelastic what does this imply would happen to consumption of this good if you were to win the lottery?
What will be an ideal response?
Economics
One reason why economists often use models in their analysis is that
A) a model helps us to understand, explain, and predict economic phenomena in the real world. B) a model accurately pictures every detail of the real world economy. C) a model relates to individual thought processes rather than behavior. D) it is relatively easy to perfectly specify a model.
Economics