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

question 37

Multiple Choice

Refer to the data provided in Table 17.2 below to answer the following question(s) . The table shows the relationship between income and utility for Sue.
Table 17.2
$$\begin{array} { | c | c | } \hline \text { Income } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 20,000 & 20 \\\hline \$ 40,000 & 40 \\\hline \$ 60,000 & 60 \\\hline \$ 80,000 & 80 \\\hline\end{array}$$
-Refer to Table 17.2. Sue earns $40,000 annually. She has the opportunity to bet her entire salary on the upcoming super bowl. If Sue takes the bet, she will pick the Patriots. She believes that the Patriots have a 50-50 chance of winning the game. If the Patriots win, Sue will double her money ($80,000) 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:

Quiet Evenings

Periods of time characterized by a lack of noise and activity, often considered peaceful or tranquil.

Utility

In economics, the satisfaction or benefit derived by consuming a product or service.

Pumpkin Pie

A traditional American dessert made from a spiced pumpkin-based custard filling in a pie crust, often served during fall and Thanksgiving.

Want

A desire for goods or services that are not necessary for basic survival but are perceived as desirable.