Sally Kink Is an Expected Utility Maximizer with Utility Function

question 21

Multiple Choice

Sally Kink is an expected utility maximizer with utility function pu(c₁) + (1 - p) u(c₂) , where for any x < 1,000, u(x) = 2x, and for x greater than or equal to 1,000, u(x) = 2,000 + x.

• A) Sally will be risk averse if her income is less than $1,000 but risk loving if her income is more than $1,000.
• B) Sally will never take a bet if there is a chance that it leaves her with wealth less than $2,000.
• C) Sally will be risk neutral if her income is less than $1,000 and risk averse if her income is more than $1,000.
• D) For bets that involve no chance of her wealth exceeding $1,000, Sally will take any bet that has a positive expected net payoff.
• E) None of the above.

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Definitions:

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A surgical procedure for removing the uterus through the vagina, often due to uterine fibroids, prolapse, or cancer.

Preoperative Phase

The period before an operation; begins when the decision for surgery has been made and ends when the client is transferred to the operating room bed.

Admission History

Detailed record of a patient's past and present health information, collected upon their admission to a healthcare facility.

Penrose Drain

A type of surgical drain made from soft rubber that is used to remove fluids from a wound.