Suppose That an Individual Is Risk-Averse

question 42

Multiple Choice

Suppose that an individual is risk-averse.If this individual's utility function is depicted in a graph,with income measured on the horizontal axis and utils on the vertical axis,the graph will be an upward-sloping:

• A)straight line through the origin.
• B)straight line with a positive vertical intercept.
• C)curve with a steadily increasing slope (i.e. ,a curve that is convex from below).
• D)curve with a steadily decreasing slope (i.e. ,a curve that is concave from below).

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Definitions:

Horizontal Specialization

A division of labor where tasks are divided among employees at the same level within an organization, based on skills or expertise.

Mechanistic Structure

A mechanistic structure in an organization is characterized by rigid hierarchy, high levels of formalization, and centralized decision making.

Organic Structure

A flexible and decentralized organizational structure, characterized by low levels of formalization and high levels of employee autonomy, aimed at fostering innovation and adaptability.

Single Corporation

A business or company that operates independently without subsidiaries or affiliations with other entities.