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Lecture notes of 3 pages for the course Business economics 1 at UMA (exercises)
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RE she puenium of Leonard 20
b Would risk a verse person
a ever puefeo the gamble
to receive 17 for save
Jolie not There might be some risk eveuse individual
with 17 LCE i 20 LE
Eg
becauseofRA
Woo Id risk loving peuo.eu
a ever 17 to the lottery
RL Not CE IE Eg7 20 A7
Ex 2 hates utility m x 0.35 PETE
3,250 2000 1,250
g
1 800 2000 1,200
A E g e
49 1250 t 51 of 1250 95
b U success b 1250
M
failure
0 35
FYI Koo 40
uf ez o g O 35 I 00
132 t 400 0
µ not invest µ o 0.35 FE 7
E Mcg7 49 Xl 250 t 52 ul 12003
4.9
c i Kate's exp utility from the investment for
success any
probability P
LEEau g
p to t l p O top
ii utility level she'd
get if she got
N E Cg
af All 250 P C P
f a zoo 0,35 I 245 O p l
3
Ero F
V
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