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:

Ambiguous Drawing

A type of visual stimuli that can be interpreted in multiple ways, illustrating the brain's processing of ambiguous information.

Visual Image

A mental representation of an object, person, or scene, derived from sensory input, such as sight.

Spreading Activation Network

A model in cognitive psychology that explains how concepts in memory become activated, spreading across associated concepts, facilitating retrieval of related information.

Activation

The initiation or triggering of action, response, or increased function in biological and mechanical systems.