The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Bob will buy theft insurance to cover the full $100
A) as long as it does not cost more than $25.
B) as long as it does not cost more than $50.
C) as long as it does not cost more than $70.
D) at any price.
C
Economics
You might also like to view...
What is meant by the term economic growth?
What will be an ideal response?
Economics
The term strategy in terms of game theory refers to
a. the relationship between price and marginal cost b. the relationship between individual firm demand curves and the market demand curve c. each firm's game plan in making decisions d. the interrelationship between price and marginal revenue e. the tendency for collusive firms to generate normal profits
Economics