Multiple Choice
If Monica says she is indifferent between the prospect (2 candy bars, shot in the head; .999, .001) and the prospect (1 candy bar; 1 orange juice) then:
A) her behaviour is violating the axioms of expected utility theory.
B) her behaviour is consistent with the continuity assumption.
C) her behaviour is consistent with the substitution assumption.
D) one would question her sanity.
Correct Answer:
Verified
Correct Answer:
Verified
Q23: Which one of the sets below is
Q24: If one's indifference curves in a state
Q25: In choices involving risk, an individual chooses:<br>A)the
Q26: The law of large numbers states that
Q27: Which of the following represents the utility
Q29: A risk- inclined individual is characterized by
Q30: Suppose Diana's utility function is given by:
Q31: Stephanie's utility function is given by U
Q32: The expected utility hypothesis requires information about
Q33: Subjective probabilities<br>A)are used both in the case