Refer to the Data Provided in Table 17 -Refer to Table 17

question 33

Multiple Choice

Refer to the data provided in Table 17.2 below to answer the following question(s) . The table shows the relationship between income and utility for Sue.
Table 17.2
$$\begin{array} { | c | c | } \hline \text { Income } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 20,000 & 20 \\\hline \$ 40,000 & 40 \\\hline \$ 60,000 & 60 \\\hline \$ 80,000 & 80 \\\hline\end{array}$$
-Refer to Table 17.2. Sue earns $40,000 annually. She has the opportunity to bet her entire salary on the upcoming super bowl. If Sue takes the bet, she will pick the Patriots. She believes that the Patriots have a 50-50 chance of winning the game. If the Patriots win, Sue will double her money ($80,000) but if they lose she loses her entire salary ($0) . Sue's utility if she does not take the bet is ________ and her expected utility from the bet is ________.

• A) 40; 80
• B) 40; 40
• C) 40; 0
• D) 80; 20

---

Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members in the form of cash.

Stock Dividends

A dividend payment made to shareholders in the form of additional shares rather than cash.

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and/or capital appreciation.