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-Jennifer Has the Utility of Wealth Curve Shown in the Figure

Question 16

Multiple Choice

-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. Jennifer would have the same expected utility as she currently has if her wealth was ________ with no risk. A) $13,500 B) $12,000 C) $4,500 D) $9,000
-Jennifer has the utility of wealth curve shown in the figure above. She owns a car worth $15,000, and that is her only wealth. There is a 10 percent chance that Jennifer will have an accident within a year. If she does have an accident, her car is worthless. Jennifer would have the same expected utility as she currently has if her wealth was ________ with no risk.


A) $13,500
B) $12,000
C) $4,500
D) $9,000

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