Look at the Utility Function Graphed Below and Select the Type

question 290

Multiple Choice

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

• A) Risk averter
• B) Risk neutral
• C) Risk taker
• D) Risk player

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Definitions:

Average Variable Costs

Costs that vary with the level of output, calculated by dividing the total variable costs by the quantity of output produced.

Shutting-Down

A short-run decision by a firm to halt production because operating would lead to a loss greater than the fixed costs.

Hostages

Individuals held captive by others as security for the fulfillment of specific conditions or demands.

Trading Partner

An entity or country that engages in commerce or trade with another, often under agreed terms or through treaties.