Figure 27-4

question 1

Multiple Choice

Figure 27-4.The figure shows a utility function for Alex.
-Refer to Figure 27-4.From the appearance of Alex's utility function,we know that

• A)if Alex owns a house,then he definitely would buy fire insurance provided the cost of the insurance was reasonable.
• B)Alex would voluntarily exchange a portfolio of stocks with a high average return and a high level of risk for a portfolio with a low average return and a low level of risk.
• C)Alex is risk averse.
• D)Alex is not risk averse.

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Definitions:

Judgment Goal

Refers to the objective to make evaluations or decisions based on certain criteria or standards.

Current Concern

A current concern involves immediate issues or interests that are of importance or relevance to an individual at the present time.

Idiographic Goals

Highly personalized or unique goals that are specific to an individual, reflecting personal aspirations, values, and interests.

McClelland's Primary Goals

Refers to David McClelland's theory identifying three primary motivations in people: the need for achievement, the need for affiliation, and the need for power.