-The Above Figure Shows Bob's Utility Function

question 97

Multiple Choice

-The above figure shows Bob's utility function.He currently has $100 of wealth,but there is a 50% chance that it could all be stolen.Bob is risk averse because

• A) his utility function is concave.
• B) he has diminishing marginal utility of wealth.
• C) he is willing to pay a premium to avoid a risky situation.
• D) All of the above.

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Definitions:

Passive

Accepting or allowing what happens without active response or resistance.

Negative Punishment

involves removing a desirable stimulus after a behavior to decrease the likelihood of that behavior occurring again.

Reinforcement

In operant conditioning, any event that strengthens the behavior it follows.

Aversive Event

An unpleasant or painful stimulus that induces changes in behavior through negative reinforcement or punishment.