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Assume That Odds of a New Computer Requiring Any Type

Question 12

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Assume that odds of a new computer requiring any type of service in the first two years are less than 1 in 10.000,and the average cost of any computer service call is only $50.However,Karen pays $200 for a two-year service contract on her new computer.She explains that her peace of mind is well worth the cost of the contract.What is Karen using to make her decision to purchase the service agreement in this case


A)  noncompensatory factors 
B)  subjective probability 
C)  expected value 
D)  subjective utility

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