Tuesday, September 01, 2009
ECON 292 -- Assignment for 9/2
How would you expect to respond if placed in the following situations:
A. Assume you have $100 in spending money. Further assume that you have a date on Friday night. On the date, you have the choice to spend money on food, entertainment, or gifts. Any money you don't spend on the date you can keep to buy whatever else you like.
(1) How much money would you allocate to the date and how much would you keep for other stuff?
(2) Of the money you allocated to your date, how much would you spend on food, entertainment, or gifts?
(3) If the price of entertainment increased, how would your choices change?
(4) If you had $200 instead of $100, how would your choices change?
B. Assume you have a part-time job that pays you $15/hour. If you were given a raise so you earned $17/hour, would you change the number of hours that you worked? If so, would you increase or decrease the number of hours you worked?
C. Assume I offered you the following bet:
I will flip a coin. If it comes up heads, I will give you an A for this class. If it comes up tails I will fail you? Would you take the bet? What if heads got you an A and tails got you a C? Heads A, tails B? What if I let you pick a card from a standard deck of playing cards and any heart got you an A, any diamond got you a B, any spade a C, and any club a D, would you take this bet?
D. Assume you have $6000, if I offered you the chance to invest the $6000 and get paid $10,000 in 10 years, would you make this investment?
I'm pretty sure I would, perhaps due to skewed priorities, or a certain lack of faith in the viability in generalized evaluation systems (even while acknowledging the expertise of the system proctor).
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