Quiz Space

Managerial Economics · End Term · 13 Sept 2026 · May 2026 term · Set S2

Question 25: Suppose that John’s utility function is U= 100I What inv…

Question 25

+1 markOne correct option

Consider the two lotteries A and B. With lottery A, there is a 0.90 chance that you receive a payoff of $0 and a 0.10 chance that you receive a payoff of $400. With lottery B, there is a 0.5 chance that you receive a payoff of $30 and 0.50 chance that you receive a payoff of $50.
Based on the above data, answer the given subquestions.

Suppose that John’s utility function is U= 100I What investment will John choose?

  1. A

    Investment A

  2. B

    Investment B

  3. C

    John is indifferent

  4. D

    Cannot be determined

Show answer

Correct answer

  • C

    John is indifferent

See the whole paperTake it as a mock test

Question 25 of 43 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 13 Sept 2026, in the May 2026 term (Managerial Economics 13 Sep 26 (Session 2)). It carries 1 mark.

More questions from this paper

  1. Q1Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = \$8. Let Q…
  2. Q2Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = \$8. Let Q…
  3. Q3P=............
  4. Q4Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = \$8. Let Q…
  5. Q5Suppose two firms operate in a market and can produce at a constant average (and marginal) cost of AC = MC = \$8. Let Q…
  6. Q6Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision…
  7. Q7Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision…
  8. Q8Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision…
  9. Q9Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision…
  10. Q10Now suppose that the two firms are competing in the Stackelberg manner where one of the firms makes its output decision…
  11. Q11The equilibrium quantity and price before incidence of tax are, P=…..
  12. Q12The equilibrium quantity and price before incidence of tax are, Q=…..
  13. Q13Consumer surplus before incidence of tax is, C.S = …..
  14. Q14Producer surplus before incidence of tax is, P.S = …….
  15. Q15The equilibrium quantity after the incidence of tax is, Qt = ……
  16. Q16The new price that the buyer pays after incidence of tax is, Pb= ……
  17. Q17The net price received by the seller after the incidence of tax is, Ps= …….
  18. Q18The loss in consumer surplus due to incidence of tax is, ΔCS= ….
  19. Q19The loss in producer surplus due to incidence of tax is, ΔPS= …..
  20. Q20The total tax revenue is, R= ……
  21. Q21What is the expected value of Lottery A…………..
  22. Q22What is the expected value of Lottery B………….
  23. Q23Suppose that John’s utility function is U= 100I What is John’s expected utility from Lottery A…………
  24. Q24Suppose that John’s utility function is U= 100I What is John’s expected utility from Lottery B…………
  25. Q26Suppose that John’s utility function is U= 100I Choose the correct alternative
  26. Q27Calculate the output of paper if it is produced under competitive conditions and no attempt is made to monitor or regul…
  27. Q28Calculate the price of paper if it is produced under competitive conditions and no attempt is made to monitor or regula…
  28. Q29Determine the socially efficient price of the paper PS=............
  29. Q30Determine the socially efficient quantity of paper QS=...............
  30. Q31Based on the above data, answer the given subquestions.
  31. Q32What is the cost minimizing input combination if the firm wants to produce 720 units per year? L=.............
  32. Q33What is the cost minimizing input combination if the firm wants to produce 720 units per year? K=..............
  33. Q34What are the monopolist’s profit-maximizing price and quantity, P= …….
  34. Q35What are the monopolist’s profit-maximizing price and quantity, Q= …
  35. Q36The resulting profit will be, π= ……..
  36. Q37The firm’s Lerner index is, L= ……
  37. Q38A monopolist never produces in
  38. Q39Choose the incorrect statement
  39. Q40Adverse selection occurs when
  40. Q41Moral hazard occurs when contracts are written in such a way that
  41. Q42Which of the following best describes the free rider problem?
  42. Q43Figure question