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.

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Definitions:

Invalid Argument

An argument whose conclusions do not logically follow from its premises, making it unsound or flawed in its reasoning.

Descriptive Premise

A premise that is based on empirical facts.

Argument

A set of statements or reasons made to support or oppose a proposition.

Rhetoric

The defense of a particular position usually without adequate consideration of opposing evidence in order to win people over to one’s position.