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Amanda Recently Graduated from College,and She Has a Job Offer

question 6

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Amanda recently graduated from college,and she has a job offer with uncertain income.There is a 70% probability that she will make $10,000 and a 30% probability that she will make $70,000.Suppose Amanda is offered another job with a certain income.All else equal,if she has a constant marginal utility of income,she will accept the second job offer only if it pays more than:


Definitions:

Perform Operation

To carry out a specific task or process, often referring to mathematical computations or business procedures.

Simplify

To reduce a mathematical expression or problem to its simplest form by performing operations and eliminating complexity.

Like Terms

In mathematics, like terms are terms that contain the same variables raised to the same power, making them eligible for addition or subtraction.

Perform Operation

Execute or carry out a specific mathematical or logistical task.

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