Albert's Expected Utility Function Is Pc^1/2₁ + (1 - P)c^1/2₂

question 21

Multiple Choice

Albert's expected utility function is pc^1/2₁ + (1 - p) c^1/2₂, where p is the probability that he consumes c₁ and 1 - p is the probability that he consumes c₂.Albert is offered a choice between getting a sure payment of $Z or a lottery in which he receives $400 with probability .30 or $2,500 with probability .70.Albert will choose the sure payment if

• A)Z > 2,090.50 and the lottery if Z < 2,090.50.
• B)Z > 1,040.50 and the lottery if Z < 1,040.50.
• C)Z > 2,500 and the lottery if Z < 2,500.
• D)Z > 1,681 and the lottery if Z < 1,681.
• E)Z > 1,870 and the lottery if Z < 1,870.

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Definitions:

Temperament

An individual's inherent personality traits and predispositions that significantly affect their behavior and interactions with others.

Developing Organism

An entity, typically in the early stages of physical and biological formation, particularly prior to birth.

Conception

The process of fertilization where a sperm cell merges with an ovum, leading to the formation of a zygote and the start of pregnancy.

Fetus

A developing mammal after the embryonic stage and before birth, particularly in humans from the ninth week of pregnancy until birth.