The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Bob is risk averse because
A) his utility function is concave.
B) he has diminishing marginal utility of wealth.
C) he is willing to pay a premium to avoid a risky situation.
D) All of the above.
D
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Rental income includes
A) the payment for the use of land. B) the payment for the use of all rented inputs. C) no income from rental housing because most houses are occupied by their owners. D) Both answers A and B are correct.
How does expected future income affect saving supply?
What will be an ideal response?
When the slope of the total revenue curve is equal to the slope of the total cost curve
A) profit is maximized. B) marginal revenue equals marginal cost. C) the marginal cost curve intersects the total average cost curve. D) the total cost curve is at its minimum. E) Both A and B
Which of the following statements is false?
A) To an economist, the resource land includes natural resources such as minerals, forests, water and unimproved land. B) To an economist, the resource capital consists of unproduced goods that can be turned into produced goods. C) To an economist, the resource labor consists of the physical and mental talents people contribute to the production process. D) To an economist, the resource entrepreneurship refers to a particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things.