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Utility Function Assignment | Homework For You

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December 10th, 2019

Simba is a street vendor downtown Nairobi who sells roasted maize during the month of May. Simba has $0 wealth and he makes $10 (~1000 Kshs) when it rains, but he makes $38 (~3850 Kshs) if it does not rain. Simba’s utility function is given by U(C)=C2, and the probability of rain is 50%.

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Homework For You

Which of the following describes Simba’s risk preferences?

Simba is risk averse

Simba is risk neutral

Simba is risk loving

None of the above. Get Economics homework help today

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