Some foolish teenagers play "chicken" on Friday nights. Two teenagers drive their cars at each other at high speeds. The first to swerve to the side is the "chicken" and loses. If both swerve out of the way, they are both chicken and both lose. Neithe4r of the drivers wants to get into an accident. It causes a significant loss in utility (possibly death). However, both do not want to be known as a chicken. This causes some loss in utility. What is the equilibrium of this game? Do you think the two drivers will necessarily produce an equilibrium outcome? Do you think the chances are better or worse for achieving and equilibrium outcome if the tow players know each other? Explain. Do you think it matters whether the two players have played the game before? Explain.

Part 1
Entrepreneur Jones has a utility index of 5 for a loss of $1,000, and 12 for a profit of $3,000. He says that he is indifferent between $10 for certain and the following lottery: a 0.4 chance at a $1,000 loss and a 0.6 chance at a $3,000 profit. What is his utility index for $10?
Part 2
Suppose that Smith has a uti

Jennifer's utility function is given by U = x + y, where x = food and y = clothing. If her income = $100, price of x = $10 and price of y= $5, find (graphically) her utility maximizing bundle of x and y. If her utility changes to U = 3x + y, how will her utility-maximizing bundle be affected?

The Utility Marketing Model has 4 components. These components can help educate business professionals in understanding customer purchasing patterns. The utility marketing model considers convenience, feelings, and how easy it is to get the item it their time frame. This solution looks at each of the components.

1- An agent, with wealth 50, faces a probability 0.2 of a loss 35. The agent is offered insurance at a premium rate of 0.25. The agent has the von Neumann-Morgenstern utility function, u=lnx, where x is wealth. How much insurance should the agent buy?
2 - Show that a risk averse agent offered terms worse than actuarially fair

You are choosing between two goods, X and Y, and your marginal utility from each is as shown below. if your income is $9 and the price of X and Y are $2 and $1, respectively,
Units of X Marginal Utility for X
1 10

Using the following information, calculate total utility and marginal utility.
A. Plot the total utility curve
B. Plot marginal utility directly below total utility
C. At what marginal utility value does total utility reach at maximum?
Number of utils for the first unit 300
Number of utils for the second unit

Present Value -
What is present value and how is it interconnected to future value? Is "value" as used in the term a monetary value, a utility value, or are they the same thing?
[See the attached Question file for full description]

Bridget has a limited income and consumes only wine and cheese, her current consumption choice is four bottles of wine and 10 pounds of cheese. The price of the wine is $10 per bottle, and the price of cheese is $4 per pound. The last bottle of wine added 50 units to Bridget's utility, while the last pound of cheese added 40 u