A Person Is Risk Loving If

question 43

Multiple Choice

A person is risk loving if:

• A) for a given level of expected consumption, he prefers a risky bundle to a risk less one.
• B) his indifference curve is convex to the origin.
• C) his indifference curve is concave to the origin.
• D) his indifference curve is concave to the origin and for a given level of expected consumption, he prefers a risky bundle to a risk less one.

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Definitions:

Diseconomies of Scale

A situation in which a firm's production costs increase as it produces more, leading to less efficiency.

Essential Resource

A resource deemed vital for the survival of an organism, community, or operation, whose absence can lead to severe negative impacts.

Elastic Market Demand

Describes a market situation where the quantity demanded of a good or service significantly responds to changes in its price.

Perfectly Elastic Demand

Perfectly elastic demand is a market scenario where the demand for a product can drastically change (increase or decrease) at the slightest change in price, essentially to infinity.