Mel's utility of wealth is 130 units at $3,000, 160 units at $5,000, and 190 units at $9,000. Starting from zero wealth, he must choose between options A and B
Option A gives him $5,000 for sure. Option B gives him $3,000 with probability 0.4 or $9,000 with probability 0.6. Mel
A) will choose A.
B) will choose B.
C) is indifferent between A and B.
D) needs more information to make a choice.
B
Economics
You might also like to view...
Real GDP will increase
A) only if the quantity of final goods and services produced rises. B) if either the price level rises or the quantity of final goods and services produced rises. C) only if the price level rises. D) only if the price level falls.
Economics
The initial deposit required by a buyer or seller of a futures contract is known as
A) credit. B) margin requirement. C) debit. D) marking.
Economics