Suppose That Thom Experiences a Greater Loss in Utility If

question 54

Multiple Choice

Suppose that Thom experiences a greater loss in utility if he loses $50 than he would gain in utility if he wins $50. This implies that Thom's

• A)marginal utility diminishes as wealth rises, so he must be risk averse.
• B)marginal utility diminishes as wealth rises, but we can't tell from this if he is risk averse.
• C)marginal utility increases as wealth rises, so he must be risk averse.
• D)marginal utility increases as wealth rises, but we can't tell from this if he is risk averse.

---

Definitions:

Dual-process model

A theory explaining human thought and behavior as the outcome of two distinct systems: one automatic and unconscious, and the other deliberate and conscious.

Restoration focused

Relates to efforts or methodologies aimed at restoring or revitalizing something to its original or a better state.

Loss focused

Centered on addressing, managing, or coping with experiences of losing something or someone important, often involving grief or mourning processes.

End-of-life care

Palliative care focused on providing relief from the symptoms and stress of a serious illness in the final phase of life.