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Figure 14-2

Question 186

Multiple Choice

Figure 14-2. The figure shows a utility function for Mary Ann. Figure 14-2. The figure shows a utility function for Mary Ann.   -Refer to Figure 14-2. Suppose the vertical distance between the points (0, A)  and (0, B)  is 5. If her wealth increased from $1,050 to $1,350, then A) Mary Ann's subjective measure of her well-being would increase by less than 5 units. B) Mary Ann's subjective measure of her well-being would increase by more than 5 units. C) Mary Ann would change from being a risk-averse person into a person who is not risk averse. D) Mary Ann would change from being a person who is not risk averse into a risk-averse person.
-Refer to Figure 14-2. Suppose the vertical distance between the points (0, A) and (0, B) is 5. If her wealth increased from $1,050 to $1,350, then


A) Mary Ann's subjective measure of her well-being would increase by less than 5 units.
B) Mary Ann's subjective measure of her well-being would increase by more than 5 units.
C) Mary Ann would change from being a risk-averse person into a person who is not risk averse.
D) Mary Ann would change from being a person who is not risk averse into a risk-averse person.

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