Tim Is Offered Two Gambles

question 48

Multiple Choice

Tim is offered two gambles.With gamble A, he either gains $2 or loses $1 with a 50% probability.With gamble B, he either gains $3 or loses $2 with a 50% probability.Tim prefers gamble B to gamble A.What can we conclude?

• A)Tim is risk loving.
• B)Tim is risk neutral.
• C)Tim is risk averse.
• D)Insufficient information to determine.

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Definitions:

Communication

The act or process of using words, symbols, or actions to express ideas, thoughts, or feelings, and to exchange information between individuals or groups.

Coordination

The organized arrangement of group activities and efforts to ensure a smooth operation or completion of a common task.

Differentiate Labour

The process of distinguishing or creating differences between types of labor based on skills, tasks, or responsibilities.

Divide Labour

The allocation of different parts of a work process or task to different individuals in order to improve efficiency and productivity.