Refer to the Data Provided in Table 17 -Refer to Table 17

question 38

Multiple Choice

Refer to the data provided in Table 17.4 below to answer the following question(s) . The table shows the relationship between income and utility for Celeste.
Table 17.4
$$\begin{array} { | c | c | } \hline { \text { Income } } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 40,000 & 50 \\\hline \$ 80,000 & 90 \\\hline \$ 120,000 & 120 \\\hline \$ 160,000 & 140 \\\hline\end{array}$$
-Refer to Table 17.4. Suppose Celeste has a 1/3 chance of becoming disabled in any given year. If she does become disabled, she will earn $0. If Celeste does not become disabled, she will earn her usual salary of $120,000. Celeste has the opportunity to purchase disability insurance which will pay her her full salary in the event she becomes disabled. Such an insurance policy would be worth ________ to Celeste.

• A) $0
• B) $40,000 or less
• C) more than $40,000 but less than $80,000
• D) $80,000 or more

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Definitions:

Fundamental Attribution Error

The tendency to overemphasize personality traits and underestimate situational factors when explaining other people's behavior.

Role Playing

A method or technique for training, therapy, or entertainment in which participants act out roles in a narrative or scenario.

Cognitive Dissonance

The mental strain experienced when an individual harbors two or more conflicting beliefs, ideas, or values simultaneously.

Fundamental Attribution Error

The tendency to attribute others' actions to their character or personality, while attributing our own behaviors to external situations.