Consider the Following Scenario When Answering the Following Questions

question 159

Multiple Choice

Consider the following scenario when answering the following questions:
Ivett and Desiree are considering playing a game called Matching Fifties.In this game,Ivett and Desiree will each place a $50 bill on the table.Both players will then toss a fair coin.If both Ivett and Desiree toss heads or if they both toss tails,Ivett wins the $100 on the table.If one woman tosses heads and the other tosses tails,Desiree wins the $100 on the table.
-Ivett decides that she is not willing to play this game because a loss of $50 to Desiree will cause her to lose more utility than she should gain if she won $50 from Desiree.Ivett would be considered ________,but if she was ________,she would be willing to play the game.

• A) risk loving; risk averse
• B) risk neutral; risk averse
• C) risk averse; risk neutral
• D) risk loving; risk neutral
• E) risk neutral; risk loving

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Definitions:

Land Improvements

Enhancements made to a piece of land to increase its value, such as landscaping, fencing, and adding utilities.

Modifying

The act of making changes or alterations to something, often to improve it or adjust it to different conditions or uses.

New Business

Pertains to recently established companies or the act of securing new commercial engagements or clients in a business context.

Machinery and Equipment

Assets that include heavy machinery and other equipment used in the production or supply of goods and services.