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

question 106

Multiple Choice

Refer to the data provided in Table 17.6 below to answer the following question(s) . The table shows the relationship between income and utility for Isabel.
Table 17.6
$$\begin{array} { | c | c | } \hline \text { Income } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 40,000 & 20 \\\hline \$ 80,000 & 50 \\\hline \$ 120,000 & 90 \\\hline \$ 160,000 & 150 \\\hline\end{array}$$
-Refer to Table 17.6. Suppose Isabel has a 25% chance of becoming disabled in any given year. If she does become disabled, she will earn $0. If Isabel does not become disabled, she will earn her usual salary of $160,000. Isabel has the opportunity to purchase disability insurance for $40,000 which will pay her her full salary in the event she becomes disabled. Isabel's utility with the policy is

• A) 112.5 and her expected utility without the policy is 90.
• B) 90 and her expected utility without the policy is 112.5.
• C) 90 and her expected utility without the policy is 37.5.
• D) 37.5 and her expected utility without the policy is 75.

Differentiate between implicit costs and opportunity costs.

Understand the concepts of consideration and initiating structure and their impacts on leadership effectiveness.

Identify various traits investigated in leadership studies and differentiate relevant from irrelevant traits.

Comprehend leadership categorization theory, including its potential for bias and discrimination in leadership.

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Definitions:

Personal Use

The use of a company's assets or services by an individual for their private needs, not for business purposes.

Income Ratio

A financial metric used to assess a company's ability to generate income relative to revenue, sales, assets, or equity.

Capital Balances

The amount of money or value of assets contributed by the owners or partners in a company, not including earnings or profits.

Service

An intangible product offered to customers that does not result in ownership of anything.