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Figure 14-4

Question 159

Multiple Choice

Figure 14-4. The figure shows a utility function for Dexter. Figure 14-4. The figure shows a utility function for Dexter. -Refer to Figure 14-4. Suppose the vertical distance between the points (0, A) and (0, B) is 12. If his wealth increased from $1,300 to $1,800, then A) Dexter's subjective measure of his well-being would increase by less than 12 units. B) Dexter's subjective measure of his well-being would increase by more than 12 units. C) Dexter would change from being a risk-averse person into a person who is not risk averse. D) Dexter would forgo the insurance he bought when his wealth was $1,300.
-Refer to Figure 14-4. Suppose the vertical distance between the points (0, A) and (0, B) is 12. If his wealth increased from $1,300 to $1,800, then


A) Dexter's subjective measure of his well-being would increase by less than 12 units.
B) Dexter's subjective measure of his well-being would increase by more than 12 units.
C) Dexter would change from being a risk-averse person into a person who is not risk averse.
D) Dexter would forgo the insurance he bought when his wealth was $1,300.

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