The Friedman-Savage Utility Function Can Explain Why

question 62

Multiple Choice

The Friedman-Savage utility function can explain why

• A) people buy automobile insurance.
• B) somebody becomes addicted to gambling.
• C) people become more risk averse as their wealth increases.
• D) people place small bets to have a chance at winning a large amount.

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Definitions:

Life Crises

Significant life events that require a substantial amount of adjustment and can lead to personal growth or distress.

Biological Perspective

A way of looking at psychological issues by examining the biological bases of behavior, including genetics, brain structures, and biochemical processes.

Extinguish

In psychological terms, to diminish or eliminate a conditioned response, often through repeated exposure to the conditioned stimulus without the unconditioned stimulus.

Fear Of Driving

An anxiety disorder characterized by an intense fear or phobia of driving a vehicle.