(Table: Natasha's Total Utility) Look at the Table Natasha's Total

question 122

Multiple Choice

(Table: Natasha's Total Utility) Look at the table Natasha's Total Utility.Natasha earns $50,000
Per year but faces losing $20,000 of it if she is late with her work.If there is a 25% probability that Natasha will be late with her work and her income will equal $30,000, Natasha would be willing to pay for insurance to eliminate the uncertainty in her income.Natasha wants
A guaranteed income of $50,000.

• A)$4,000
• B)$5,000
• C)$7,500
• D)$9,500

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Definitions:

Voluntary Exchange

An economic transaction where both parties agree to trade goods or services by mutual consent without coercion.

Tax Revenue

The income that the government receives from taxation of individuals and businesses.

Federal Government

The national government of a federal state, which holds sovereignty over broad aspects of governance, such as defense, foreign affairs, and monetary policy.

Payroll Taxes

Taxes imposed on employers and employees, based on the wages and salaries paid to workers, used to fund social security and healthcare services.