Refer to the data provided in Table 17.5 below to answer the following question(s). The table shows the relationship between income and utility for Lucy.
Table 17.5 IncomeTotal Utility $00$10,00010$20,00020$30,00030$40,00040Refer to Table 17.5. Lucy earns $20,000 annually. She has the opportunity to bet her entire salary on the upcoming super bowl. If Lucy takes the bet, she will pick the Packers. She believes that the Packers have a 50-50 chance of winning the game. If the Packers win, Lucy will double her money ($40,000) but if they lose she loses her entire salary ($0). Lucy's utility if she does not take the bet is
A. 20 and her expected utility from the bet is 0.
B. 20 and her expected utility from the bet is 40.
C. 20 and her expected utility from the bet is 20.
D. 40 and her expected utility from the bet is 10.
Answer: C
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