For Someone Whose Utility Is Equal to Twice the Square

question 32

Multiple Choice

For someone whose utility is equal to twice the square root of income, where X denotes income,and the coefficient of relative risk aversion is ½. If this individual's income is currently $25,what insurance premium would (s) he pay to avoid a 20% chance of having income fall to $9?

• A) $1.79
• B) $2.20
• C) $3.20
• D) $3.84
• E) $4.02

Appreciate the significance of community mental health programs and deinstitutionalization.

Recognize the impact of structural and dynamic changes in family therapy techniques.

Acknowledge the role of cultural and ethnic factors in therapy effectiveness.

Understand the operational techniques in couples and family therapy.

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Definitions:

Marginal Cost

The supplementary cost resulting from manufacturing an extra unit of a good or service.

Typeset

The arrangement and composition of text in preparation for printing and publication.

Inverse Demand Function

A mathematical expression that describes the relationship between the price of a good and the quantity demanded, showing how price changes as a function of demand.

Unit Tax

A tax that is imposed on a per unit basis, meaning that a specific amount is taxed for each unit of a good or service sold.