Figure: Differences in Risk Aversion (Figure: Differences in Risk

question 179

Multiple Choice

Figure: Differences in Risk Aversion (Figure: Differences in Risk Aversion) Look at the figure Differences in Risk Aversion.An important reason Ernest and Salvatore may differ in their aversion to risk is that they may differ in:

• A)how their marginal utility is affected by income.
• B)their understanding of risk.
• C)their initial wealth holding or initial income level.
• D)how their marginal utility is affected by income and in their initial wealth holding or initial income level.

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Definitions:

Productivity

The efficiency with which an individual, organization, or economy converts inputs into useful outputs.

Stress-Related Illnesses

Health issues directly influenced or exacerbated by stress, including mental and physical conditions.

Occupational Safety and Health Act

A law passed to ensure worker and workplace safety by setting and enforcing standards; oversees occupational health and safety in the United States.

OSHA

The Occupational Safety and Health Administration, a federal agency responsible for ensuring safe and healthful working conditions by setting and enforcing standards.