A Risk-Averse Person

question 137

Multiple Choice

A risk-averse person

• A)has a utility curve where the slope increases with wealth, and might take a bet with a 70 percent chance of wining $400 and a 30 per chance of losing $400.
• B)has a utility curve where the slope increases with wealth, and would never take a bet with a 70 percent chance of wining $400 and a 30 per cent chance of losing $400.
• C)has a utility curve where the slope decreases with wealth, and might take a bet with a 70 percent chance of wining $400 and a 30 per chance of losing $400.
• D)has a utility curve where the slope decreases with wealth, and would never take a bet with a 70 percent chance of wining $400 and a 30 per cent chance of losing $400.

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Definitions:

Weak Situations

Scenarios or contexts where social norms and expectations are not strongly defined, allowing for greater variability in behavior.

Strong Situations

Situations where cues for socially expected or appropriate behavior are very clear, reducing individual differences in responses.

Sociometer Theory

Sociometer theory is a psychological mechanism proposed to measure an individual's level of social acceptance or rejection, impacting self-esteem.

Reflected Appraisal

A process by which individuals form perceptions of themselves based on how they believe others view them.