Mel Is Thinking of Going on a Cruise

question 75

Multiple Choice

Mel is thinking of going on a cruise.Mel values a cruise in nice weather at $2,000 and values a cruise in bad weather at $50.According to a very reliable source,the probability of nice weather is 60% and the probability of bad weather is 40%.Trip insurance is sometimes available.If purchased,it allows travelers to delay the cruise until the weather is nice.
If a gamble has an expected value of $10,then one can predict that

• A)only risk-averse persons will take the gamble.
• B)no risk-averse person will take the gamble.
• C)all risk-neutral persons will take the gamble.
• D)the gamble never pays off more than $10.

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Definitions:

Glycogen

A form of glucose stored in the liver and muscles, used as a source of energy in animals and humans.

Sexual Drive

The biological and psychological aspects of a person's desire or urge to engage in sexual activity.

Libido

The psychological and emotional energy associated with the sex drive.

Eros

In classical psychology, Eros represents the life instinct—the drive for survival, propagation, creativity, and life-building activities.