A Given Person Is Risk Loving Through All Relevant Levels

question 30

Multiple Choice

A given person is risk loving through all relevant levels of income.The expected utility of receiving an extra $5,000 with probability 0.5 and an extra $15,000 with probability 0.5 must be:

• A)larger than the utility of receiving an extra $10,000 with certainty.
• B)equal to the utility of receiving an extra $10,000 with certainty.
• C)smaller than the utility of receiving an extra $10,000 with certainty.
• D)larger than or equal to the utility of receiving an extra $10,000 with certainty, depending upon the initial level of income.
• E)smaller than or equal to the utility of receiving an extra $10,000 with certainty, depending upon the initial level of income.

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Definitions:

Mushroom

A type of fungus characterized by a cap and stem, with many species producing edible or medicinal fruiting bodies.

Herbivore

Primary consumer in a grazing food chain; a plant eater.

Plant Foods

Edible parts of plants, including fruits, vegetables, grains, nuts, and seeds, that are consumed by humans and other herbivores.

Detritus-Feeders

Organisms that feed on dead organic material, contributing to decomposition and nutrient cycling.