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An Individual Must Choose Between 4 Insurance Policies x1,x2,x3,x4x_{1}, x_{2}, x_{3}, x_{4}

Question 8

Multiple Choice

An individual must choose between 4 insurance policies, x1,x2,x3,x4x_{1}, x_{2}, x_{3}, x_{4} , where x1x_{1} is the company's default option. The utility the individual receives from each option is ordered the following way: u(x3) >u(x1) u(x2) >u(x4) u\left(x_{3}\right) >u\left(x_{1}\right) \geq u\left(x_{2}\right) >u\left(x_{4}\right) . Which option does the individual choose?


A) x1x_{1}
B) x2x_{2}
C) x3x_{3}
D) x4x_{4}

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