Oskar's Preferences Over Gambles in Which the Probability of Events

question 6

Multiple Choice

Oskar's preferences over gambles in which the probability of events 1 and 2 are both can be represented by the von Neuman-Morgenstern utility function .5y^.5₁ + .5y^.5₂, where y₁ is his consumption if event 1 happens and y₂ is his consumption if event 2 happens. A gamble that allows him a consumption of $9 if event 1 happens and $25 if event 2 happens is exactly as good for Oskar as being sure to have an income of

• A) $12.5.
• B) $9.
• C) $16.
• D) $17.
• E) None of the above.

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Definitions:

Comprehensive Goals

Objectives that are broad and inclusive, encompassing a wide range of factors and aiming to achieve extensive outcomes.

Strong Motivator

A powerful influence or stimulus that encourages individuals to perform actions or achieve goals.

Smaller Steps

A strategy involving breaking down goals into manageable, smaller tasks to improve the likelihood of accomplishment.

Recognition Need

The human desire to be acknowledged and valued by others, particularly in the context of one's contributions or achievements.