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EC311 · Intermediate Microeconomics

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EC311 / TOPIC 16

5.3 Risk and expected utility

A teaching model for this topic. Its illustrative numbers may differ from the worked question.

  1. 01Predict
  2. 02Try
  3. 03Explain
  4. 04Challenge

Why does risk matter with the same expected wealth?

Illustrative model numbers, not Thailand or current economic data.

Widen the outcomes with expected wealth fixed at 100. What happens to CE for u=√W?