-Beachcomber Beatrice Spent Her Entire Wealth of $100,000 to Build

question 9

Multiple Choice

-Beachcomber Beatrice spent her entire wealth of $100,000 to build a beach house on the Gulf of Mexico. There is a 10 percent chance that the house will be totally destroyed by a hurricane. Beatrice's utility of wealth schedule is given in the table above. What is the minimum amount that the insurance company would require Beatrice to pay for an insurance policy that pays $100,000 if her beach house is destroyed by a hurricane? (Assume the insurance company has no other costs.)

• A) $10,000
• B) $30,000
• C) $40,000
• D) $60,000

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Definitions:

Smaller Class Sizes

Educational settings with a reduced number of students per class, aimed at providing more personalized attention and improving learning outcomes.

Costly

Having a high price or great expense; also can refer to situations or actions requiring significant sacrifice or effort.

Multiple Intelligences

A theory suggesting that intelligence is not a single general ability, but rather comes in multiple forms, such as linguistic, logical-mathematical, musical, bodily-kinesthetic, spatial, interpersonal, and intrapersonal intelligences.

Howard Gardner

An American developmental psychologist best known for his theory of multiple intelligences, which suggests that intelligence is multidimensional and not solely measured by IQ.