Option a Provides $9,000 with Probability 50 Percent or $11,000

question 26

Multiple Choice

Option A provides $9,000 with probability 50 percent or $11,000 with probability 50 percent. Option B provides $8,000 with probability 50 percent or $12,000 with probability 50 percent. For most people the cost of risk associated with B is

• A) less than that associated with A.
• B) the same as that associated with A.
• C) exactly twice that associated with A.
• D) more than twice that associated with A.

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Definitions:

Sigmund Freud

Originating from Austria, this neurologist created psychoanalysis, a therapeutic approach to address mental illness via conversation with a psychoanalyst.

Psychology

The scientific study of the mind and behavior, exploring various aspects from biological foundations to social influences.

Study of Consciousness

The examination of the nature and properties of the state of being aware of and able to think about oneself and the environment.

John Watson

An American psychologist who is considered one of the founders of behaviorism, emphasizing the study of observable behaviors rather than the mind.