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

question 199

Multiple Choice

-Ashton has the utility of wealth curve shown in the above figure. He owns a sports car worth $30,000, and that is his only wealth. Ashton is a careless driver and there is a 30 percent chance that he will have an accident within a year. If he does have an accident, his car is worthless. What is Ashton's expected wealth?

• A) $30,000
• B) $9,000
• C) $21,000
• D) zero

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