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Satsume Satsume
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6 years ago
Farmer Brown grows wheat on his farm in Kansas, and the weather during the growing season makes this a risky venture.  Over the many years that he has been in business, he has learned that rainfall patterns can be categorized as highly productive (HP) with a probability of .2, moderately productive (MP) with a probability of .6, and not productive at all (NP) with a probability of .2.  With these various rainfall patterns, he has also learned that the inflation adjusted yields are $25,000 with NP weather, $10,000 with MP weather, and $50,000 with HP weather.  Calculate the expected yield from growing wheat on Farmer Brown's farm. What can be learned about Brown's attitude toward risk from this problem?  Explain.
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Microeconomics

Microeconomics


Edition: 8th
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oracledarrenoracledarren
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6 years ago
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Satsume Author
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6 years ago
You make an excellent tutor!
Gorgio_De
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Yesterday
Brilliant ツ
asd454512
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2 hours ago
Thanks
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