Your Utility Function Is Given by U = M1/2

question 3

Multiple Choice

Your utility function is given by U = M1/2. You have a choice: take $100 in cash or flip a coin. If you flip a coin, the outcomes are as follows: heads, you win $225; tails, you win $49. You will

• A)take the $100 in cash.
• B)take the gamble.
• C)be indifferent between the cash and the gamble.
• D)it is impossible to say with the information given.

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Definitions:

Off-price Retailers

Retail stores that sell branded goods at lower prices than mainstream retail stores, often through the sale of surplus stock or from past seasons.

Convenience Stores

Retail outlets that offer a limited range of food and household products, intended for quick and convenient purchasing.

Mom-and-Pop

Small, often family-owned, businesses that operate in a local community or neighborhood, distinct from larger chains or corporations.

Manufacturers

Entities or individuals involved in the production of goods using labor, machinery, tools, and chemical or biological processing or formulation.