100BMT1S11D-2 - Name: Perm: TA: Econ 100B (Grossman)Spring...

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Name: Perm: TA: Econ 100B (Grossman)—Spring 2011 Midterm 1—Version D April 19, 2011 Instructions: This is a closed-book, closed-notes exam. No calculators or electronic devices are allowed. Please turn of and put away all phones and other electronic devices. There are 8 multiple-choice questions and two Free-response questions. Answer as many as you can in the time allowed. I do not expect everyone to be able to answer all questions. IF you get stuck on something, I suggest moving on and coming back later when/iF you have time. IF you have a question, please raise your hand. Good luck! Multiple choice – 25 out of 50 pts. (8 qns., 3 pts. each + 1) Answer these questions on your Scantron. Your score will only be based on the marks on your Scantron. You will not receive any credit For anything written on your exam paper. You will receive 1 extra point For correctly writing your name, perm number, version (A,B,C, or D), and TA’s name on your Scantron. Exams without the version marked will be assigned the average score For all Four versions. 1. Over the weekend you have some time to get out of Isla Vista and go up to gamble at the Chumash Casino. You arrive to Chumash Casino with 49 dollars. Your preferences are represented by u ( c )= c . Which of these gambles has high enough expected utility to be worth taking a risk on? I. Pay all your money for a 60% chance of winning 100 dollars. II. Pay nothing for a 50/50 chance of winning $32. III. Pay $13 for a .75 chance to win $28. IV. Pay $45 for a 2/3 probability of winning $21 and a 1/3 probability of winning $5.
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This note was uploaded on 05/08/2011 for the course ECON 100B taught by Professor Kilenthong during the Spring '08 term at UCSB.

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100BMT1S11D-2 - Name: Perm: TA: Econ 100B (Grossman)Spring...

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