Consider a poor couple making decisions about the number of children. Suppose that in this society,...

Consider a poor couple making decisions about the number of children. Suppose that in this society, there is no old age insurance, and parents must rely on their children for support.

Parents would like to receive old age support with a probability of at least q. Denote the number of children by n. Let p be the probability that a child (male or female) looks after the parents in old age.

a) What is the probability that a child does not look after the parents in old age?

b) What is the probability that out of n children at least one child looks after the parents in old age? Assume each child’s decision is independent of all others.

c) Find an expression that gives the optimal rule for the parents for deciding the number of children, given that they want the probability of being looked after to be at least q.

d) Let q=15/16 and p=1/2.What is the number of children that this couple will choose to have?

Expert Solution

orchestra answered 1 year ago

The representative consumer will consider the real price of goods when making decisions about how much...

The representative consumer will consider the real price of goods when making decisions about how much to spend. (true or false)?

Executives must consider the benefits and risks of competing internationally when making decisions about whether to...

Executives must consider the benefits and risks of competing internationally when making decisions about whether to expand overseas. Executives also need to determine the likelihood that their companies will succeed when they compete in international markets by examining demand conditions, factor conditions, related and supporting industries, and strategy, structure, and rivalry among its domestic competitors. For these executives that may face many uncertainties in a global marketplace, assess the three possible risks that may be faced by decision-makes seeking to...

To talk about the rich, the poor, and the way society is economically stratified sounds like...

To talk about the rich, the poor, and the way society is economically stratified sounds like the job of economists. Why should sociologists be interested in stratification? How does a better understanding of stratification potentially contribute to the well-being of society?

EXPLAIN WITH YOUR WORDS HOW THE THREE MAJOR ETHICS FUNCTION IN SOCIETY AND FOR MAKING DECISIONS

A wealthy couple comes to you asking for advise about transferring property to their children. The...

A wealthy couple comes to you asking for advise about transferring property to their children. The are vaguely aware of wills and gifts but do not know many details. I particular they keep asking you "why can't we just avoid the estate tax by giving our kids everything while we are still alive?" Briefly explain to them why they cannot do this. Specifically, address the following: The relationship of gifts to estates How much gift can be given subject to...

Boys and Girls: Suppose a couple plans to have two children and the probability of having...

Boys and Girls: Suppose a couple plans to have two children and the probability of having a girl is 0.50. (a) What is the sample space for the gender outcomes? {bb, bg, gg} {b,g} {bb, bg, gb, gg} {bb, gg} (b) What is the probability that the couple has one boy and one girl? 1 3 1 4 1 2 3 4 (c) What is the probability that the couple will have at least one girl? 1 4 1...

Macroeconomic policy is about making difficult decisions involving tradeoffs. It is impossible to talk about ‘the...

Macroeconomic policy is about making difficult decisions involving tradeoffs. It is impossible to talk about ‘the best policy. Why ? (350 words) No written responses please, only typed.

Consider the ways that a couple can have three children. Define the following events: Event M:...

Consider the ways that a couple can have three children. Define the following events: Event M: They have a child of each gender. Event N: They have at most one boy. Suppose that they are more likely to have a boy (B) than a girl (G), by a ratio of 11 to 9. a. Using set notation like I did in the 2-child case (due to time, I didn’t use set notation in the 3-child case), list out the events...

As a manager when you are making decisions for the company,you need to consider the distinction...

As a manager when you are making decisions for the company,you need to consider the distinction between how the decisions will impact the company is short time and in a long time. Describe the information needed to make these decisions. What test can you run to help make your decision justify your answer

The concept of professional judgement-making informed decisions about course of action that are appropriate in the...

The concept of professional judgement-making informed decisions about course of action that are appropriate in the circumstances-underpins the accounting profession. Discuss how heuristics/biases and culture can influence accountants. decision making with reference to specific judgements that are typically made by accountants.

Question