(a) Consider the choice between the following two options: take a sure $1 or participate in a lottery with a 50% chance at $3 and a 50% chance at losing $1. • risk neutral people [Select] • risk loving people [Select] • risk averse people [Select]

(a) Consider the choice between the following two options: take a sure $1 or participate in a lottery with a 50% chance at $3 and a 50% chance at losing $1. • risk neutral people [Select] • risk loving people [Select] • risk averse people [Select]

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter1: The Art And Science Of Economic Analysis

Section: Chapter Questions

Problem 2.5P

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Question

all dropdown options are same as the one shown

(a) Consider the choice between the following two options:
take a sure $1 or participate in a lottery with a 50% chance at $3 and a 50% chance at losing
$1.
• risk neutral people [Select]
• risk loving people [Select]
• risk averse people [Select]
(b) Consider the choice between the following two options:
take a sure $1 or participate in a lottery with a 50% chance at $8 and a 50% chance at losing
$7.
• risk neutral people [Select]
• risk loving people [Select]
• risk averse peopl✓ [Select ]
prefer sure $1
prefer the lottery
are indifferent between the two options
could prefer sure $1, could prefer lottery, or could be indifferent

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