(a) Consider the choice between the following two options: take a sure $1 or participate in a lottery with a 50% chance at $3 and a 50% chance at losing $1. • risk neutral people [Select] • risk loving people [Select] • risk averse people [Select]

(a) Consider the choice between the following two options: take a sure $1 or participate in a lottery with a 50% chance at $3 and a 50% chance at losing $1. • risk neutral people [Select] • risk loving people [Select] • risk averse people [Select]

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter27: The Basic Tools Of Finance

Section: Chapter Questions

Problem 5PA

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Question

all dropdown options are same as the one shown

(a) Consider the choice between the following two options:
take a sure $1 or participate in a lottery with a 50% chance at $3 and a 50% chance at losing
$1.
• risk neutral people [Select]
• risk loving people [Select]
• risk averse people [Select]
(b) Consider the choice between the following two options:
take a sure $1 or participate in a lottery with a 50% chance at $8 and a 50% chance at losing
$7.
• risk neutral people [Select]
• risk loving people [Select]
• risk averse peopl✓ [Select ]
prefer sure $1
prefer the lottery
are indifferent between the two options
could prefer sure $1, could prefer lottery, or could be indifferent

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