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:

Welfare Dependency

A situation where individuals or households become reliant on government benefits for their income over a long period, potentially disincentivizing employment.

Poverty

The state of having insufficient financial resources to meet basic living needs such as food, shelter, and healthcare.

Cost-Of-Living Adjustment

An increase in income or benefits designed to offset inflation and maintain the purchasing power of individuals, often applied to wages, salaries, and social security benefits.

Rate Of Inflation

The percentage increase in the general price level of goods and services in an economy over a period, indicating the rate at which purchasing power is eroding.