There Are Two Events, 1 and 2

question 38

Multiple Choice

There are two events, 1 and 2. The probability of event 1 is p and the probability of event 2 is 1 - p. Sally Kink is an expected utility maximizer with a utility function is pu(c₁) + (1 - p) u(c₂) , where for any number x, u(x) = 2x if x < 1,000 and u(x) = 1,000 + x if x is greater than or equal to 1,000.

• A) Sally is a risk lover.
• B) Sally will be a risk averter if she is poor but will be a risk lover if she is rich.
• C) Sally will be a risk lover if she is poor but a risk averter if she is rich.
• D) If there is no chance of her wealth exceeding $1,000, then she will take any bet that has positive expected net winnings.
• E) None of the above.

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Definitions:

Multitouch Functions

Features of devices that recognize and respond to simultaneous touches and gestures on the display surface.

Tracking Mouse

A technology or method used to monitor and analyze the movement and clicks of a mouse by a computer user, often to improve user experience or for research purposes.

Dynamically Continuous Innovation

Innovations that represent a significant change to an existing product or market but do not create new categories, often involving technological advancements.

Disrupts Consumers

Strategies or products that significantly alter consumer habits, expectations, or experiences in a market.