Suppose we can represent Brandon's preferences for water with an expected utility function U(WR, WD) = (1/4)?WR + (3/4)?WD, where WD represents a quantity of water during a drought and WR represents a quantity of water in a rainy season. Brandon is:
A. risk averse.
B. risk neutral.
C. risk loving.
D. There is not enough information to answer this question.
A. risk averse.
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There is uncertainty about the precise level of the natural rate of unemployment
a. True b. False
If consumers would be willing to purchase the same quantity of a good no matter what its price was, the demand curve would
a. be a vertical line, and demand would be perfectly inelastic. b. be a horizontal line, and the demand would be perfectly elastic. c. not exist. d. be identical to the supply curve for the good.
When the Fed lowers the discount rate, it makes it
What will be an ideal response?
Taxes are not considered a leakage because they become transfers in the circular flow of income and spending model.
Answer the following statement true (T) or false (F)