Jessica Must Choose Option a or Option B

question 193

Multiple Choice

Jessica must choose option A or option B. Option A gives her $10,000 for sure. Option B gives her $5,000 if a fair coin toss shows heads and $15,000 if it shows tails. If Jessica is risk averse her utility of wealth curve becomes

• A) flatter as her wealth increases and she will choose option A.
• B) flatter as her wealth increases and she will choose option B.
• C) steeper as her wealth increases and she will choose option A.
• D) steeper as her wealth increases and she will choose option B.

---

Definitions:

Extinction

The process by which a learned behavior diminishes or disappears as a result of the repeated absence of an unconditioned stimulus or reinforcement.

Reward Centers

Brain structures that regulate the experience of pleasure and motivate individuals towards behaviors necessary for survival, such as eating and reproduction.

Latin Word

A term originating from Latin, a classical language that has contributed to many words in modern languages, especially in science, law, and medicine.

Knowledge

Facts, information, and skills acquired through experience or education; awareness or familiarity gained by experience of a fact or situation.