Assume Brandon's Benefit Function for Water Is S(W)= √W and He

question 24

Multiple Choice

Assume Brandon's benefit function for water is S(W) = √W and he consumes water both in droughts,W_D,or in the rainy season,W_R.Assume his current consumption bundle is W_D = 36 and W_R = 25 and the probability of drought is 0.75.Brandon's certainty equivalent is:

• A) 45.75 units of water.
• B) 33.06 units of water.
• C) 30.5 units of water.
• D) 61 units of water.

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Definitions:

Journal Entry

A record in accounting that represents a transaction where at least two account balances are affected.

Cash Overage

A situation where the amount of cash on hand is greater than the expected amount, often due to errors in cash management or recording.

Internal Control System

A process implemented by management and other personnel to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting, and compliance with laws and regulations.

Purpose

The reason for which something is done or created, or for which something exists.