The above figure shows Bob's utility function. He currently has $50 and is considering investing all of it in an investment that has a 50% chance of being worth $100 and a 50% chance of being worth $0. Bob will
A) definitely make the investment because the expected utility of the investment exceeds the utility of his $50.
B) definitely not make the investment because the expected utility of the investment is less than the utility of his $50.
C) definitely make the investment because he is indifferent between having $50 and having an investment with an expected value of $50.
D) definitely not make the investment because he is indifferent between having $50 and having an investment with an expected value of $50.
B
You might also like to view...
In a mixed-strategy Nash equilibrium, a player is willing to randomize because:
a. this confuses opponents. b. he or she is indifferent between the actions in equilibrium. c. the actions provide the same payoffs regardless of what the other player does. d. he or she does not know what the other player is doing.
When aggregate expenditure increases, the price level either decreases or remains unchanged, but it cannot increase
Indicate whether the statement is true or false
Suppose a monopsonist hires its second worker and this person has a marginal labor cost of $75 per day. If the wage rate is now $62.50 per day, what was the wage rate of the first worker before the second was hired?
a. $40 b. $45 c. $50 d. $55 e. $60
The Federal Reserve is run at the national level by _____
a. Congress b. the president c. a board of governors d. the federal government