If Ann's Utility Function Is U =3W⁰

question 90

Multiple Choice

If Ann's utility function is U =3W⁰.⁵,and she invests in a business which can yield $6,400 with probability 1/5,and $3600 with probability 4/5,then her Arrow-Pratt measure of risk aversion is

• A) 0.5/w.
• B) 1/w.
• C) 1.5w.
• D) 3/w.

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Definitions:

Yellow Dog Contract

An employment agreement where the worker promises not to join a labor union during the term of employment, now illegal in many jurisdictions.

Union Workers

Employees who are members of a labor union, which represents their interests in negotiations with employers.

Employers

Individuals or organizations that hire and pay people to work for them, typically controlling the terms of employment.

Norris-LaGuardia Act

A 1932 United States federal law that limited the power of federal courts to issue injunctions against non-violent labor disputes and marked a shift towards protecting labor rights.