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.What is Brandon's expected utility? A) 5.75 B) 33.25 C) 11 D) 30.5

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Quizplus · Accepted Answer

Expected utility = (0.75 * √36) + (0.25 * √25) = 5.75

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