Figure 14-4

question 159

Multiple Choice

Figure 14-4. The figure shows a utility function for Dexter.
-Refer to Figure 14-4. Suppose the vertical distance between the points (0, A) and (0, B) is 12. If his wealth increased from $1,300 to $1,800, then

• A)Dexter's subjective measure of his well-being would increase by less than 12 units.
• B)Dexter's subjective measure of his well-being would increase by more than 12 units.
• C)Dexter would change from being a risk-averse person into a person who is not risk averse.
• D)Dexter would forgo the insurance he bought when his wealth was $1,300.

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Definitions:

Parents

Biological, step, or adoptive guardians who bear responsibility for raising and caring for children.

Children's Actions

Legal proceedings involving minors, often related to protection, custody, or rights.

Contract

A binding legal contract between two or more entities that establishes enforceable duties under the law.

Infant

A legal term referring to a person who is not yet of the legal age of majority, often considered under 18 years old.