Exhibit 14.8 The Following Questions Use the Information Below

question 91

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-A "risk averse" decision maker assigns the ____ relative utility to any payoff but has a(n) ____ marginal utility for increased payoffs.

• A) largest; increasing
• B) largest; diminishing
• C) smallest; diminishing
• D) smallest; increasing

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Definitions:

Cerebrum

The largest part of the brain, responsible for voluntary activities, sensation, thought, reasoning, and memory.

Cortex

The outer layer of the cerebrum in the brain, involved in higher brain functions such as thought and action.

Pineal Body

A small endocrine gland in the brain that produces melatonin, a hormone that regulates sleep patterns.

Puberty

The developmental stage during which children mature sexually and physical changes occur, preparing the body for reproductive capability.