There Are Two Events, 1 and 2

question 35

Multiple Choice

There are two events, 1 and 2.The probability of event 1 is p and the probability of event 2 is 1 - p.Sally Kink is an expected utility maximizer with a utility function is pu(c₁) + (1 - p) u(c₂) , where for any number x, u(x) = 2x if x < 1,000 and u(x) = 1,000 + x if x is greater than or equal to 1,000.

• A)Sally is a risk lover.
• B)Sally will be a risk averter if she is poor but will be a risk lover if she is rich.
• C)Sally will be a risk lover if she is poor but a risk averter if she is rich.
• D)If there is no chance of her wealth exceeding $1,000, then she will take any bet that has positive expected net winnings.
• E)None of the above.

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Definitions:

Conscious Thoughts

Refers to the awareness one has of their own thoughts, feelings, and sensations in the present moment.

Self-perceptions

How individuals view or perceive themselves, their abilities, appearance, and values.

Psychodynamic Therapy

A therapeutic approach that explores the psychological forces underlying human behavior, feelings, and emotions, and how they might relate to early experiences.

Relationship Patterns

Repeated ways in which individuals interact and relate to each other within their personal relationships.