Melanie Must Choose Between Two Jobs

question 82

Multiple Choice

Melanie must choose between two jobs. With job A, there is a 10% chance of earning $60,000 per year and a 90% chance of earning $50,000. With job B, there is a 50% chance of earning $46,000 and a 50% chance of earning $56,000. If Melanie is risk lover (U(W) = W²) , which job will she choose?

• A)her preferences violate the axioms of expected- utility theory.
• B)job B
• C)she is indifferent between the two jobs
• D)job A

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Definitions:

College Degrees

Certifications awarded by colleges or universities upon successful completion of a course of study, signifying academic achievement.

Emotional Divorce

Involves the psychological and emotional distancing in a marriage where the couple remains legally married but has disconnected emotionally.

Custodial Parents

Custodial parents are those who have been granted the primary legal authority and responsibility to care for and make decisions on behalf of a child following separation or divorce.

Child Support

Financial contributions made by the non-custodial parent to the custodial parent to assist in the expenses associated with raising a child.