(Table: Amy's Utility Function) Look at the Table Choosing Insurance

question 58

Multiple Choice

(Table: Amy's Utility Function) Look at the table Choosing Insurance.Amy is an entrepreneur with current income equal to $40,000.Amy is considering development of a new product.The probability that her new product earns Amy $30,000 in additional income is 0.5, and the probability that Amy incurs a reduction of $10,000 from her current income is also 0.5.Amy's expected utility after developing her new product is utils.

• A)1360
• B)860
• C)500
• D)680

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Definitions:

Prototype

An original form or model of something from which later versions are derived or on which they are based.

Typical Example

An instance or case that represents a common or usual pattern, often used as a standard or model to explain broader concepts.

Category

A class or division of people or things regarded as having particular shared characteristics.

Semantic Priming

The process by which a preceding stimulus influences the response to a later stimulus, based on meaning.