-Andrew Has the Utility of Wealth Curve Shown in the Above

question 203

Multiple Choice

-Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000, and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless. Andrew would have the same expected utility as he currently has if his wealth was ________ and he faced no uncertainty.

• A) $30,000
• B) $27,000
• C) $21,000
• D) $18,000