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(Table: Utility Function II) Suppose the Person's Utility Function Is

Question 43

Multiple Choice

(Table: Utility Function II) Suppose the person's utility function is given by U = I0.5, where I is income. (Table: Utility Function II) Suppose the person's utility function is given by U = I<sup>0.5</sup>, where I is income. What guaranteed income level would offer the same expected utility level as that from the uncertain income (i.e., find the certainty equivalent) ? A) $432,600 B) $464,400 C) $448,900 D) $457,000 What guaranteed income level would offer the same expected utility level as that from the uncertain income (i.e., find the certainty equivalent) ?


A) $432,600
B) $464,400
C) $448,900
D) $457,000

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