Figure 27-5

question 25

Multiple Choice

Figure 27-5.The figure shows a utility function for Dexter.
-Refer to Figure 27-5.Suppose the vertical distance between the points (0,A) and (0,B) is 12.If his wealth increased from $1,300 to $1,800,then

• A)Dexter's subjective measure of his well-being would increase by less than 12 units.
• B)Dexter's subjective measure of his well-being would increase by more than 12 units.
• C)Dexter would change from being a risk-averse person into a person who is not risk averse.
• D)Dexter would forgo the insurance he bought when his wealth was $1,300.

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Definitions:

Standard Deviation

An indicator of the extent to which a set of numbers spreads out, showing the deviation of the values from their average.

Normally Distributed

Describes a distribution of data where most observations cluster around the mean, forming a bell-shaped curve.

Standard Deviation

Standard deviation is a statistic that measures the dispersion or variability of a dataset relative to its mean.

Standard Deviation

A means to assess the degree of variability or scattering in a set of numerical values.