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Old October 4th, 2008, 11:58 PM
truxmonster truxmonster is offline
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Default Stats/Econ help -- Expected Utility Calculation

Matthew is a contestant on the game show "Behind the Curtain." The host has given him $50. In front of Matthew are three curtains. Behind one curtain is a jar with three dimes. Behind the second curtain is a check for $30. Behind the third curtain is a check for $120. Assuming he is risk neutral and interested only in the cash value of the value, is Matthew willing to trade the $50 for a chance to pick a curtain at random and take whatever prize it conceals? Explain by writing the appropriate expected utility calculation.
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