Catherine is risk averse. When faced with a choice between a gamble and a certain level of wealth she will
A) always prefer the gamble.
B) always prefer the certain level of wealth.
C) prefer the gamble if the expected utility from it is higher than the utility from the certain level of wealth.
D) prefer the certain level of wealth if the expected utility from the gamble is higher than the utility of the certain level of wealth.
C
You might also like to view...
Refer to the figure above. What is the total cost of the firm when it produces the profit-maximizing level of output?
A) $60 B) $120 C) $180 D) $240
Compared to the 19th century, the population of the 20th century
(a) was largely urbanized. (b) was 3.7 times larger in number. (c) experienced a 63 percent increase in life expectancy at birth. (d) can be described by all of the above.
If you borrow money at a nominal interest rate of 5 percent and the inflation rate is 10 percent, what real interest rate will you pay?
a. -5 percent b. 0.5 percent c. 2 percent d. 5 percent e. 10 percent
Government purchases of goods and services are:
A. Nonexhaustive because they do not directly absorb resources and account for production B. Exhaustive because they directly absorb or employ resources and account for production C. Both exhaustive and nonexhaustive because in some cases they do directly absorb resources or account for production and in other cases they do not D. Neither exhaustive or nonexhaustive because of the tax revenues that finance these purchases