Sanjay won a poker game against his friends. Now he has to choose between $550 (the winnings) and the chance to play anew game. In this new game Sanjay has a 20% chance of winning nothing and a 80% chance of winning $1,000.The following graph presents the utility function of Sanjay with respect to money:U(w)U(w)U(1,000)U (800)U(550)5508001.000 w10.1.21.0 point possible (graded, results hidden)By how much money would his winnings need to increase or decrease so that Sanjay is indifferent between the$550 and the new game? (in case of an increase, insert a positive number; in case of a decrease, insert anegative number). At a different table, Juan wins $600 in a blackjack game. Similarly, he has to choose between $600 or the chance toplay a new game. In this game, Juan has a 60% chance of winning nothing and a 40% of winning $1,000.The following graph presents the utility function of Juan with respect to money:U(w)U(w)U(1,000)U(700)U(600)U(400)400600 7001,000 w10.2.21.0 point possible (graded, results hidden)By how much money would his winnings need to increase or decrease so that Juan is indifferent between the$600 and the new game? (in case of an increase, insert a positive number; in case of a decrease, insert anegative number).

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10.2.2 1.0 point possible (graded, results hidden) By how much money would his winnings need to increase or decrease so that Juan is indifferent between the $600 and the new game? (in case of an increase, insert a positive number; in case of a decrease, insert a negative number).

10.2.2 1.0 point possible (graded, results hidden) By how much money would his winnings need to increase or decrease so that Juan is indifferent between the $600 and the new game? (in case of an increase, insert a positive number; in case of a decrease, insert a negative number).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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