An Individual Is More Likely to Reject a Risk- Pooling

question 14

Multiple Choice

An individual is more likely to reject a risk- pooling arrangement if:

• A)he or she experiences rising marginal utility of wealth.
• B)he or she is risk loving.
• C)he or she is risk averse.
• D)he or she experiences decreasing marginal utility of wealth.

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business, such as raw materials and labor expenses.

Resource Price

The cost of inputs used in the production of goods or services, such as raw materials, labor, and capital.

Profit-Maximizing

An approach or strategy aimed at achieving the highest possible profit from business operations.