David's Utility Function If David's Current Wealth Is $61,000, Then

question 305

Multiple Choice

David's Utility Function

If David's current wealth is $61,000, then

• A) his gain in utility from gaining $1,000 is less than his loss in utility from losing $1,000. David is risk averse.
• B) his gain in utility from gaining $1,000 is less than his loss in utility from losing $1,000. David is not risk averse.
• C) his gain in utility from gaining $1,000 is greater than his loss in utility from losing $1,000. David is risk averse.
• D) his gain in utility from gaining $1,000 is greater than his loss in utility from losing $1,000. David is not risk averse.

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Definitions:

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