The individual pictured in Figure 5.2.3: O would receive a utility of 12 from a sure $6000. would receive a utility of 18 from a sure $6000. O prefers a sure $6000 to a 50% chance of $4000 and a 50% chance of $8000. has an expected utility of 12 from a 50% chance of $4000 and a 50% chance of $8000.

The individual pictured in Figure 5.2.3: O would receive a utility of 12 from a sure $6000. would receive a utility of 18 from a sure $6000. O prefers a sure $6000 to a 50% chance of $4000 and a 50% chance of $8000. has an expected utility of 12 from a 50% chance of $4000 and a 50% chance of $8000.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The individual pictured in Figure 5.2.3:
O would receive a utility of 12 from a sure $6000.
Owould receive a utility of 18 from a sure $6000.
O prefers a sure $6000 to a 50% chance of $4000 and a 50% chance of $8000.
has an expected utility of 12 from a 50% chance of $4000 and a 50% chance of $8000.

Ubility
30
18
12
6
Figure 5.2.3
N.
456
8
Utility Function
The individual pictured in Figure 5.2.3:
Income
(thousands of dollars)

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