Instead of the seismic sounding, Joe could pay a geologic consultant for a field inspection that will yield information about the subsurface structure. The consultant gives Joe the following information about the accuracy of his inspection: if the subsurface structure is truly type A, then there is a 85% probability that the inspection will indicate that subsurface structure is type A; if the subsurface structure is truly type B, then there is a 50% probability that the inspection will indicate that subsurface structure is type B. Joe is risk neutral in this situation. Joe can get the results of the inspection in time to review them before making the drilling decision. What is the expected value of the imperfect information generated by the field inspection?

Herman is covered by a cafeteria plan by his employer. his adjusted gross income (agi) is $100,000. he paid unreimbursed medical premiums in the amount of $10,500 and he itemizes deductions. what amount will herman be able to deduct for his medical insurance premium expenses?

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.

Any point on a country's production possibilities frontier represents a combination of two goods that an economy: