John Derives More Utility from Having $1,000 Than from Having

question 65

Multiple Choice

John derives more utility from having $1,000 than from having $100.From this,we can conclude that John

• A) is risk averse.
• B) is risk loving.
• C) is risk neutral.
• D) has a positive marginal utility of wealth.

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Definitions:

Primary Drives

Basic, innate urges that motivate behavior necessary for survival, such as hunger, thirst, sleep, and avoidance of pain.

Secondary Drives

Learned drives that are derived from primary drives or arising from learned associations with satisfying basic needs.

Need

A requirement of some material (such as food or water) that is essential for survival of the organism.

James-Lange Theory

An idea that posits emotions are experienced after the body undergoes physiological changes.