The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. Which of the following statements is TRUE?
A) This person has diminishing marginal utility of wealth.
B) This person is not risk averse.
C) Risky situations cause this person no loss of utility.
D) None of the above are correct.
A
Economics
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What will be an ideal response?
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A trade-off between aggregate output and inflation
A) is theoretically possible, but has never been observed in practice. B) may exist in the short run, but not in the long run. C) may exist in the long run, but not in the short run. D) exists in both the short run and the long run.
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