For an Individual Whose Utility Is Equal to Twice the Square

question 1

Multiple Choice

For an individual whose utility is equal to twice the square root of income, where X denotes income,and the coefficient of relative risk aversion is ½. For such an individual,what income level is the certainty equivalent of a risky income which has a 50% chance of being $9 and a 50% chance of being $4?

• A) $5.00
• B) $5.75
• C) $6.25
• D) $6.50
• E) $7.75

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Definitions:

Seafloor Elevation

The vertical height of the ocean floor above or below a reference surface, typically mean sea level.

Rocks Cooling

The process of igneous rocks solidifying and crystallizing from magma or lava as they lose heat.

Oceanic Divergent Boundary

A tectonic plate boundary where two oceanic plates move apart, leading to the formation of new oceanic crust through volcanic activity.

Ocean-continent Convergent

A type of tectonic plate boundary where oceanic and continental plates converge, typically resulting in subduction of the oceanic plate and formation of mountain ranges and volcanic activity on the continental plate.