Figure 27-2

question 77

Multiple Choice

Figure 27-2.The figure shows a utility function for Britney.
-Refer to Figure 27-2.Suppose the vertical distance between the points (0,A) and (0,B) is 5.If her wealth increased from $1,050 to $1,350,then

• A)Britney's subjective measure of her well-being would increase by less than 5 units.
• B)Britney's subjective measure of her well-being would increase by more than 5 units.
• C)Britney would change from being a risk-averse person into a person who is not risk averse.
• D)Britney would change from being a person who is not risk averse into a risk-averse person.

---

Definitions:

Participatory Process

A decision-making approach that involves input and active involvement from all stakeholders or group members.

Budgeting

The process of creating a plan to spend your money over a specified period, outlining projected income and expenses.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specified period, helping manage cash flow and liquidity.

Capital Expenditures Budget

A budget that outlines planned investments in long-term assets and projects, emphasizing spending on acquiring or upgrading physical assets.