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

question 131

Multiple Choice

Refer to the data provided in Table 17.5 below to answer the following question(s) . The table shows the relationship between income and utility for Lucy.
Table 17.5
$$\begin{array} { | c | c | } \hline \text { Income } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 10,000 & 10 \\\hline \$ 20,000 & 20 \\\hline \$ 30,000 & 30 \\\hline \$ 40,000 & 40 \\\hline\end{array}$$
-Refer to Table 17.5. Lucy earns $20,000 annually. She has the opportunity to bet her entire salary on the upcoming super bowl. If Lucy takes the bet, she will pick the Packers. She believes that the Packers have a 50-50 chance of winning the game. If the Packers win, Lucy will double her money ($40,000) but if they lose she loses her entire salary ($0) . This bet can be characterized as

• A) risk-neutral.
• B) an unfair bet.
• C) a fair bet.
• D) risk-loving.

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Definitions:

Rent

A periodic payment made by tenants to owners for the use of property or land, or the income derived from the lease of such property.

Resource Market

Markets where the services of the factors of production (such as labour, capital, land) are bought and sold.

Product Market

The marketplace where final goods or services are offered to consumers, businesses, and the government.

Consumer Expenditures

The total spending by consumers on goods and services for personal use.