Suppose that Irma's utility function with respect to wealth is U(W) = 300 + 20W -w?. Show that for W< 10, Irma's Arrow-Pratt risk aversion measure increases with her wealth. If p(W) is the Arrow-Pratt measure of risk aversion, then op(W) (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. Eg., a superscript can be created with the ^ character.)

Suppose that Irma's utility function with respect to wealth is U(W) = 300 + 20W -w?. Show that for W< 10, Irma's Arrow-Pratt risk aversion measure increases with her wealth. If p(W) is the Arrow-Pratt measure of risk aversion, then op(W) (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. Eg., a superscript can be created with the ^ character.)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.2P

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