Solved

Suppose I Know That Holly Always Has a Certainty Equivalent (xCE)\left(x_{C E}\right)

Question 9

Multiple Choice

Suppose I know that Holly always has a certainty equivalent (xCE) \left(x_{C E}\right) equal to 0 . Which of the following utility functions describes Holly's preferences?


A) U(x) =ln(x) \mathrm{U}(\mathrm{x}) =\ln (\mathrm{x})
B) U(x) =x\mathrm{U}(\mathrm{x}) =\mathrm{x}
C) U(x) =x\mathrm{U}(\mathrm{x}) =\mathrm{x} if x>0\mathrm{x}>0 and U(x) =2x\mathrm{U}(\mathrm{x}) =-2 \mathrm{x} if x<=0\mathrm{x}<=0
D) U(x) =xU(x) =\sqrt{x}

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions