John Derives More Utility from Having $1,000 Than from Having

question 65

Multiple Choice

John derives more utility from having $1,000 than from having $100.From this,we can conclude that John

• A) is risk averse.
• B) is risk loving.
• C) is risk neutral.
• D) has a positive marginal utility of wealth.

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Definitions:

Deduction

A logical process where a conclusion follows necessarily from the given premises; moving from general principles to specific instances.

Scope

The extent or range of view, reach, or application, often defining the boundaries of a project, study, or activity.

Parsimony

A principle in science and philosophy that prefers the simplest explanation that accounts for all observed phenomena, often referred to as Occam's razor.

Theory of Reasoned Action

A theory that predicts an individual's behavior based on their intention to perform the behavior, which is determined by attitudes towards the behavior and subjective norms.