Figure 27-5

question 101

Multiple Choice

Figure 27-5.The figure shows a utility function for Dexter.
-Refer to Figure 27-5.From the appearance of the utility function,we know that

• A)Dexter is risk averse.
• B)Dexter gains less satisfaction when his wealth increases by X dollars than he loses in satisfaction when his wealth decreases by X dollars.
• C)the property of diminishing marginal utility does not apply to Dexter.
• D)All of the above are correct.

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Definitions:

Capital Statement

A financial statement that outlines the changes in owners' equity over a specific period.

Drawings

Withdrawals made by an owner from the business for personal use, reducing the capital account of the owner.

Capital Investment

Funds invested in a business by the owners or shareholders to purchase assets or to provide working capital with the aim of generating long-term revenue and profits.

Net Loss

The result when a company's total expenses exceed its total revenues during a specific period, indicating a negative financial performance.