Use the Following to Answer Question

question 29

Multiple Choice

Use the following to answer question:
Table 14.9
Gamble A
Gamble B
Payoff
Probability
Payoff
Probability
$500
1
$1,000
0.5
0
0
0
0.5
-(Table 14.9) A _____ person prefers gamble _____ to gamble _____.

• A) risk-averse; B; A
• B) risk-averse; A; B
• C) risk-neutral; A; B
• D) risk-neutral; B; A

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Definitions:

Internal Locus

A psychological term referring to individuals who believe they have control over the outcomes of their actions and life events.

Adaptation-Level Phenomenon

The psychological process by which individuals adjust their expectations and standards based on previous experiences, influencing their perception of new stimuli.

Type B Personality

A disposition typified by its placid, lenient, and relaxed manner.

External Locus

A belief system where individuals perceive their outcomes in life as being controlled by external forces or chance.