Soran Is Risk Averse

question 86

Multiple Choice

Soran is risk averse. If her wealth rises by $100, her total utility increases by 300. If her wealth increases, her total utility will decrease

• A) by more than 300.
• B) by less than 300.
• C) by 300.
• D) by some amount that cannot be determined without more information.

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Definitions:

Average Collection Period

The average amount of time it takes for a company to receive payments owed by its customers, indicating the efficiency of the company's credit and collection policies.

Cost Of Default

The expenses and financial losses incurred when a borrower fails to make a loan payment on time.

Cost Of Discounts

The reduction in revenue a company faces when it offers products or services at a reduced price.

Receivables Balance

The total amount of money owed to a company by its customers for goods or services delivered, but not yet paid for.