ECON 171
Prof. Levkoff
Problem Set 6 Solutions
Part I. Evaluate the validity of each of the following statements. Be sure to clearly
accompany your explanation using graphs and equations where appropr
Economics 171
Problem Set 1 Solutions
S. Levkoff
Part I
a) False. CDFs cannot be downward sloping. By definition, a CDF if a function given by:
( )
If
, then
(
)
(
(
)
). That is, a CDF must be monoto
Economics 171
Problem Set 2 Solutions
S. Levkoff
Part I
a) True. We are given that
whether
where
,
, and
. We want to determine
. Recall that we can write covariance as:
[(
)(
)]
This implies:
Thus
.
Econ 171 Fall 2013
PS 5 Solutions
Levkoff
Part I
(a)
(b)
False. It relies on the assumption that poorer people have a higher value for dollars subjectively
(MU of wealth) than wealthy people. If anyth
ECON 171
Problem Set 5
Prof. Levkoff
Part I. Evaluate the validity of each of the following statements.
a) If an individual is risk averse, then that individual will not accept a fair gamble if given
ECON 171
Prof. Levkoff
Problem Set 6:
Part I. Evaluate the validity of each of the following statements. Be sure to clearly
accompany your explanation using graphs and equations where appropriate.
a)
ECON 171
Prof. Levkoff
Problem Set 2
Part I. Evaluate the validity of each of the following statements.
a) If two random variables X and Y have expected values and covariance of zero, then the
expecte
ECON 171
Problem Set 4
Prof. Levkoff
Part I. Evaluate the validity of each of the following statements.
a) The same signal to two individuals can result in both homogenous and asymmetric
information.
ECON 171
Prof. Levkoff
Problem Set 3
Part I. Evaluate the validity of each of the following statements.
a) If two events are mutually exclusive and exhaustive, then they cannot be conditioned on one
a
Economics 171
Problem Set 3 Solutions
S. Levkoff
Part I
a) False. If the events are mutually exclusive and exhaustive, then knowing that one has occurred
provided a PERFECT signal that the other had n
ECON 171
Prof. Levkoff
Problem Set 1
Part I. Evaluate the validity of each of the following statements.
a) CDFs can be downward sloping.
b) The variance is a special case of the covariance.
c) For a c
More Conditional Probability,
Information, and Signals
S. Levkoff
ECON 171
Confusing Conditional
Probabilities
A sample of doctors across the US were
asked the following question:
Results
More than 50