In Problem 9, Billy Has a Von Neumann-Morgenstern Utility Function

question 13

Multiple Choice

In Problem 9, Billy has a von Neumann-Morgenstern utility function U(c) . If Billy is not injured this season, he will receive an income of 25 million dollars. If he is injured, his income will be only 10,000 dollars. The probability that he will be injured is .1 and the probability that he will not be injured is .9. His expected utility is

• A) 4,510 dollars.
• B) between 24 and 25 million dollars.
• C) 100,000 dollars.
• D) 9,020 dollars.
• E) 18,040 dollars.

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Definitions:

IUPAC

The International Union of Pure and Applied Chemistry, an organization that sets standards for naming chemical compounds and elements, among other activities in the chemistry field.

Hydrogen Bonded

Describes a type of chemical bond that occurs when a hydrogen atom, which is covalently bonded to a highly electronegative atom, forms an electrostatic or partial covalent bond with another electronegative atom.

Tertiary Amides

Amides derived from carboxylic acids where the nitrogen atom is bonded to three other carbon atoms, not including the carbonyl carbon.

Secondary Amides

Organic compounds characterized by a carbonyl group (C=O) attached to a nitrogen atom, which in turn is bonded to two alkyl or aryl groups.