--%>
Assignment Help - homework help

Utility functions to calculate scores on the midterm

Question:

1. Nancy is taking a course in Fairy Tales from Professor Grimm and another in Philosophy from Professor Par. In each course there will be two exams, a midterm exam and a final exam. In Professor Grimm's course, Nancy's grade will be determined by the minimum of her scores on the two exams.  In Professor Par's course, the scores on the two exams are weighted equally. For each of the two courses, write thee different utility functions that describe Nancy's preference for scores on the midterm and the final exam. For each of the two courses, draw a diagram with a set of indifference curves for Nancy. Make sure to note higher and lower levels of utility.

1. Fairy Tales Course:

There are two options to get utility from: Mid term grades, and Final grades.

The utility function will take the form of:

U (m, f) = min {m, f}

Where, m = mid term grades,

              f = final exam grades

Indifference curves:

2083_Indifference curves.png

Philosophy Course:

There are two options to get utility from: Mid term grades, and Final grades.

The utility function will take the form of:

U (m, f) = 0.5m + 0.5f, since both the exams are equally weighed.

Where, m = mid term grades,

              f = final exam grades

Indifference curves:

The indifference curves will be downwards sloping straight lines with slope -1. Here is the illustration:

U = 0.5m + 0.5f

  1.   0.5m = U - 0.5f
  2.   m = 2U - f

Also, as the utility level increases, the intercept will increase, and the ICs will shift to right and up.

 

292_The arrows point out towards increasing utility.png

   Related Questions in Business Economics

  • Q : Loathed monopolization and viewed of

    Adam Smith and most of the typical economists who followed instantly in his footsteps: (i) viewed monopoly as no big problem. (ii) encouraged monopolies due to their research and development abilities. (iii) thought monopoly power was a communist plot

    		•
  • Q : Elucidate facilitating factors that

    Elucidate facilitating factors that explain the growth of trade?

    		•
  • Q : Illustrate how Macroeconomics examines

    Illustrate how Macroeconomics examines the economy as a whole?

    		•
  • Q : Describe World Trade Organization

    Describe World Trade Organization (WTO)?

    		•
  • Q : Describe Traditional approach of

    Briefly describe Traditional approach of capital structure?

    		•
  • Q : Define the for whom query in market

    The market system responses the “for whom?” query with: (i) distributing goods on the basis of require. (ii) using central planning to coordinate production decisions. (iii) catering to consumers with adequate resources to demand goods. (i

    		•
  • Q : Elucidate the ways to finance corporate

    Elucidate the ways to finance corporate activity?

    		•
  • Q : Explain the shapes of the

    Specify and explain the shapes of the marginal-benefit and marginal-cost curves and use these curves to determine the optimal allocation of resources to a particular product.  If current output is such that marginal cost exceeds marginal benefit, should more or l

    		•
  • Q : Reduce price differences by arbitrage

    When government intervention is not present, than arbitrage: (w) will reduce price differences when similar good sells at various prices within separate markets. (x) results into economic losses for traders. (y) causes high economic profits for mercha

    		•
  • Q : Individual sellers and buyers in

    Both individual sellers and buyers within perfect competition: w) can affect the market price through their own individual actions. x) can affect the market price by joining along with some of their competitors.  y) have to take the market price as a specified. z

    		•