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.

Recognize the role of fixed costs in production and how they are allocated across units of output.

Identify the characteristics of cost functions within the context of microeconomic theory.

Understand the concepts of total, fixed, variable, and marginal costs in production.

Calculate average total cost, average fixed cost, and average variable cost from given data.

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