Figure 14-3

question 41

Multiple Choice

Figure 14-3. The figure shows a utility function for Rob.
-Refer to Figure 14-3. From the appearance of Rob's utility function, we know that

• A)if Rob owns a house, then he definitely would buy fire insurance provided the cost of the insurance were reasonable.
• B)Rob would voluntarily exchange a portfolio of stocks with a high average return and a high level of risk for a portfolio with a low average return and a low level of risk.
• C)Rob is risk averse.
• D)Rob is not risk averse.

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Definitions:

Haldane

A principle named after J.B.S. Haldane, suggesting that the rate at which a gas is absorbed by a liquid is proportional to the pressure of the gas above the liquid, provided the gas does not react with the solvent.

Prokaryotic

Pertains to organisms without a distinct nucleus, consisting of bacteria and archaea.

Microfossils

Tiny fossilized structures, often less than 1mm in size, that require microscopic examination to study and are used in geological and biological research for dating rocks and understanding past environments.

Stromatolites

Layered sedimentary formations created by the growth of microbial mats, among the oldest evidence of life on Earth.