How Would You Characterize a Consumer Who Is Risk Loving

question 123

Multiple Choice

How would you characterize a consumer who is risk loving?

• A) A consumer who may accept a risky prospect even if the expected gain is negative.
• B) A consumer who demands a positive expected gain as compensation for taking risk.
• C) A consumer who completely ignores risk and makes his or her decisions solely on the basis of expected values.
• D) None of the above.

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Definitions:

Foreseen Difficulty

An anticipated challenge or problem that can be predicted based on current knowledge or trends.

Preexisting Duty

Preexisting duty refers to an obligation that a party is already legally required to perform, which cannot be used as consideration for a new contract.

Past Consideration

Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain.

Consideration

In contract law, it is something of value exchanged between parties as part of an agreement, serving as the reason or inducement to enter into the contract.