A farmer has the utility function U=C0.5 and faces a choice between planting a risky high yield
variety of maize or planting the traditional variety. The outcomes and probabilities are
summarized in the table below:
Different from the example in class, the farmer is now endowed with an initial wealth level of
500. So his/her consumption is the amount that they get from the Maize planted +500. (e.g., if a
farmer gets 1444 income from maize planting, their consumption is 1444+500=1944).
Q1. What is the farmer\'s Expected Utility should they plant the High-Yield
Maize?VarietyProbability of Good outcomeIncome in Good outcomeProbability of Bad
outcomeIncome in Bad outcomeHigh-Yield Maize0.514440.5100Traditional
Maize0.56250.5625
Solution
In case of High Yield Maize we have Expected Utility equals to
E(U)=Probability of good outcome*U((initial ealth level+Income in good
outcome))^0.5+Probability of bad outcome*U((initial ealth level+Income in bd outcome))^0.5
E(U)=0.5(1944)^0.5+0.5(600)^0.5=34.30
Ans wer is 34.30.
A father and his son were watching Jeopardy on TV. The son, a compute.pdf
1. A father and his son were watching Jeopardy on TV. The son, a computer science major,
correctly answered the questions in the category "Computer Programming, " and his father was
impressed. The father then told his son that he remembered watching a documentary on the
history of computer programming once. The father was using ____ memory while the son was
using ____ memory. semantic; episodic explicit; semantic semantic; implicit episodic;
semantic
Solution
D. Father was using the episodic memory which include a persons unique memory of a specific
event and it is different from someone else's memory of recollection of the same event. And the
son was using the semantic memory, which is consists of general facts and knowledge.
