Suppose That the Utility Function for a Decision Maker Is $$\sqrt { x }$$

question 5

Essay

Suppose that the utility function for a decision maker is represented as follows:
U(x)= $$\sqrt { x }$$ .The potential payoffs that are possible are illustrated below.
Payoff (x)
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1000
Convert these payoffs into utility values using the above function.Plot the utility curve and determine whether the decision maker is a risk avoider,risk indifferent,or a risk seeker.

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Definitions:

Correlational Designs

Research designs that examine the relationship between two or more variables without manipulating them, to determine if a relationship exists.

Counseling Process Research

A field of study focused on understanding the dynamics, processes, and outcomes of counseling sessions to enhance therapeutic effectiveness.

Randomization

A method used in experiments to ensure every participant has an equal chance of being assigned to any group, reducing bias.

Independent Variables

Variables in an experiment that are manipulated or changed to observe their effects on dependent variables.