A Risk-Averse Person

question 36

Multiple Choice

A risk-averse person

• A)has a utility curve where the slope increases with wealth,and might take a bet with a 80 percent chance of winning $300 and a 20 per chance of losing $300.
• B)has a utility curve where the slope increases with wealth,and would never take a bet with a 80 percent chance of winning $300 and a 20 per cent chance of losing $300.
• C)has a utility curve where the slope decreases with wealth,and might take a bet with a 80 percent chance of winning $300 and a 20 per chance of losing $300.
• D)has a utility curve where the slope decreases with wealth,and would never take a bet with a 80 percent chance of winning $300 and a 20 per cent chance of losing $300.

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Definitions:

Antecedent

An event or occurrence that precedes and influences the behavior, often used in behavior analysis and psychology.

Behaviour Modification

A therapy approach that aims to change undesirable behaviors through the use of positive or negative reinforcement.

Reinforcement

The process of encouraging or establishing a pattern of behavior by offering rewards or consequences.

Biological Preparedness

A concept in psychology that suggests organisms are innately predisposed to form associations between certain stimuli and responses.