Linus Piecewise Is an Expected Utility Maximizer

question 37

Essay

Linus Piecewise is an expected utility maximizer.There are two events, H and T, which each have probability 1/2.Linus's preferences over lotteries in which his wealth is h if event H happens and t if event T happens are representable by the utility function U(h, t)= u(h)/2 + u(t)/2.The function u takes the following form.For any x, u(x)= x if x < 100 and u(x)= 100 +x/2 if x is greater than or equal to 100.Draw a graph showing the indifference curves for Linus that pass through
a.the point (50, 0)
b.the point (50, 100)
c.the point (100, 100)
d.the point (150, 100)

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Definitions:

EEG

A medical test, also known as an electroencephalogram, which measures the electrical activity of the brain.

Amplitude

In physics, the maximum extent of a vibration or oscillation, measured from the position of equilibrium.

Brainwaves

Electrical impulses in the brain, measured by EEG, that reflect the brain's activity levels and states of arousal, including delta, theta, alpha, beta, and gamma waves.

REM Sleep

A phase of sleep characterized by rapid eye movements, low muscle tone, and vivid dreams, during which the brain is highly active.