Scenario 27-1
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Lisa Has a Utility Function $$U = W ^ { 1 / 2 }$$

question 32

Essay

Scenario 27-1
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Lisa has a utility function
$$U = W ^ { 1 / 2 }$$ where W is Lisa's wealth in millions of dollars and U is the utility she obtains.
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-Refer to Scenario 27-1. Suppose Lisa is faced with a choice between two options. With option A Lisa receives a guaranteed $9 million. With option B Lisa faces a lottery that pays $16 million with probability P and pays $4 million with probability (1-P). Given Lisa's utility function, how high does P need to be before Lisa will prefer option B?

Analyze how societal reactions to deviance contribute to the phenomenon of labeling and subsequent identity formation.

Recognize the influence of social structures and interactions on the definitions and perceptions of deviance.

Understand the classification and diagnostic criteria of various psychological disorders as outlined in the DSM-IV-TR.

Recognize the signs and symptoms of dissociative disorders.

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Definitions:

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.

Behavioral Economists

Scholars who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

Faulty Heuristics

Incorrect or misleading cognitive shortcuts that are used to make decisions or solve problems.