Amanda Recently Graduated from University,and She Has a Job Offer

question 69

Multiple Choice

Amanda recently graduated from university,and she has a job offer with uncertain income.There is a 70% probability that she will make $10 000 and a 30% probability that she will make $70 000.Suppose Amanda is offered another job with a certain income.All else equal,if she has a constant marginal utility of income,she will accept the second job offer only if it pays more than:

• A) $40 000.
• B) $28 000.
• C) $10 000.
• D) $21 000.

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