Look at the Utility Function Graphed Below and Select the Type

question 46

Multiple Choice

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

• A) risk player
• B) risk taker
• C) risk neutral
• D) risk averter

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Definitions:

C + S

Represents the sum of consumption (C) and savings (S), which together account for all disposable income in an economy.

Henry Ford

An American industrialist and founder of the Ford Motor Company, who revolutionized factory production with his assembly-line methods.

Wage-Price Flexibility

The ability of wages and prices to adjust freely in response to changes in supply and demand in the labor and goods markets.

Say's Law

An economic theory that proposes supply creates its own demand, suggesting that producing goods and services will in turn generate sufficient demand for those goods and services.