Stephanie's Utility Function Is Given by U = W^1/2 where

question 85

Multiple Choice

Stephanie's utility function is given by U = W^1/2 where W is the value of her house. Her house is currently valued at $105,625. She knows that her house will be destroyed by a tornado with probability .10 this spring. If it is hit, the rubble will be worth $15,625. What is her expected utility?

• A)375
• B)355
• C)255
• D)305

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Definitions:

Deactivated

A state in which a biological or chemical process, entity, or system is rendered inactive or non-functional.

Proteins

Large, complex molecules essential for the structure, function, and regulation of the body's tissues and organs.

Lipids

A diverse group of naturally occurring molecules that include fats, waxes, and oil, serving as energy storage and structural components of cell membranes.

Carbohydrates

Organic compounds made of carbon, hydrogen, and oxygen, serving as a major energy source for the body.