If Cara's Utility Falls More by Losing $600 Than It

question 106

Multiple Choice

If Cara's utility falls more by losing $600 than it rises by gaining $600,she has

• A)increasing marginal utility of wealth and is risk averse.
• B)increasing marginal utility of wealth but is not risk averse.
• C)decreasing marginal utility of wealth and is risk averse.
• D)decreasing marginal utility of wealth but is not risk averse.

---

Definitions:

Construct Validity

The degree to which a test or instrument measures the theoretical construct it is intended to measure.

Correlate

To possess a reciprocal relationship or link, where one element influences or relies upon another.

Measures

Tools or instruments used to quantify or categorize variables, typically for the purpose of research or assessment.

Test Validity

The degree to which a test accurately measures what it intends to measure.