Figure 9-4

question 26

Multiple Choice

Figure 9-4. The figure shows a utility function for Dexter.

-Refer to Figure 9-4. From the appearance of the utility function, we know that

• A) Dexter is risk averse.
• B) Dexter gains more satisfaction when his wealth increases by X dollars than he loses in satisfaction when his wealth decreases by X dollars.
• C) the property of decreasing marginal utility applies to Dexter.
• D) All of the above are correct.

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Definitions:

Egocentrically

Thinking primarily about oneself without regard for the feelings or views of others; seeing things from one's own perspective only.

Symbolic Thought

The capacity to use symbols, language, or other abstract representations to think about and communicate complex concepts.

Preoperational

The stage in Piaget's theory of cognitive development where children from about 2 to 7 years of age begin to engage in symbolic play and struggle with logic and the perspective of others.

Reversibility

The ability to recognize that numbers or objects can be changed or returned to their original state.