The Key Economic Difference Between Expected Utility and Expected Value

question 54

Multiple Choice

The key economic difference between expected utility and expected value is that

• A)expected value only considers the value of outcomes, whereas expected utility considers the tradeoff between value and risk.
• B)expected utility only considers the value of outcomes, whereas expected value considers the tradeoff between value and risk.
• C)expected utility is the maximum value obtained, whereas expect value is the mean of the values from a set of possible outcomes.
• D)None of the above-the differences are mathematical, not economic.

---

Definitions:

Anorexia Nervosa

A psychological and potentially life-threatening eating disorder characterized by extreme weight loss and self-starvation.

Bulimia Nervosa

An eating disorder characterized by episodes of binge eating followed by inappropriate methods of weight control, such as vomiting or excessive exercise.

Characteristics

Distinctive traits, qualities, or attributes that describe and differentiate entities, individuals, or groups.

Psychological Disorder

A pattern of behavioral or psychological symptoms that impact multiple life areas and/or create distress for the person affected.