Veronica is going to sell two vases to a dealer. She can sell each vase for $10. In order to bring her vases to the dealer, Veronica needs totake a bus. There is a 50% chance that allthe vases carried on one bus trip will be broken during the trip and a 50% chance that noneof the vases carried on one bus trip will be broken during the trip. A roundtrip bus ticket costs $1. Veronica’s net income is given by the revenues from the sale of her vases minus the cost of her bus trip(s). Requried:
a. How many trips would Veronica make if she were risk-neutral?
b. Suppose that Veronica’s utility from income is . What is the expected utility of net income when Veronica takes both vases on one bus trip? And when she makes two trips? What strategy is preferred?
c. Would Veronica’s preferred strategy change if the bus fare were increased to $3?

Which alternative accounting method allows farmers to record expenses and incomes in the year in which they sell their yield? gaap allows for the method, which permits farmers to subtract the expenses of producing the crop in the year in which they sell the yield and earn the revenue.

Suppose the marginal damage and marginal benefit curves in a polluted neighborhood are md = p/3 and mb = 4 – p. also, suppose that transactions costs are low, so that the consumers and the firm can bargain. we saw that in this case, the socially-optimal level of pollution is achieved. start by computing the socially-optimal p. then, for each of the following cases, compute the amount of money transferred through the bargaining process, and indicate who pays whom (i.e., whether consumers pay the firm, or vice versa). also, compute the gains to each party relative to the status quo (i.e., the starting point of the bargaining process).a)consumers have the right to clean air; firm is dominant in the bargaining process.b)consumers have the right to clean air; consumers are dominant in the bargaining process.c)firm has the right to pollute; firm is dominant in the bargaining process.d)firm has the right to pollute; consumers are dominant in the bargaining proces

Because the demand for wheat tends to be inelastic. true or false