An Agent Who Has a Linear Utility Function, Which Implies

question 35

Multiple Choice

An agent who has a linear utility function, which implies that the agent will choose between gambles strictly on the basis of their expected monetary value, is risk

• A) averse
• B) neutral
• C) preferring

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Definitions:

Concrete

A material made from a mixture of broken stone or gravel, sand, cement, and water, which can harden into a strong building material.

Abstract

Pertaining to ideas or concepts that are not concrete or tangible, often requiring thought and interpretation.

Recognizing Irony

The ability to understand when a statement is used to convey a meaning that is opposite to its literal meaning, often for humorous or emphatic effect.

Age

A measure of the time an individual has lived, often used as a key demographic variable.