Figure 5.2
-When facing a 50% chance of receiving $50 and a 50% chance of receiving $100, the individual pictured in Figure 5.2
A) would pay a risk premium of 10 utils to avoid facing the two outcomes.
B) would want to be paid a risk premium of 10 utils to give up the opportunity of facing the two outcomes.
C) would pay a risk premium of $7.50 to avoid facing the two outcomes.
D) would want to be paid a risk premium of $7.50 to avoid facing the two outcomes.
E) has a risk premium of 10 utils.

Question

Figure 5.2
-When facing a 50% chance of receiving $50 and a 50% chance of receiving $100, the individual pictured in Figure 5.2
A) would pay a risk premium of 10 utils to avoid facing the two outcomes. 
B) would want to be paid a risk premium of 10 utils to give up the opportunity of facing the two outcomes. 
C) would pay a risk premium of $7.50 to avoid facing the two outcomes. 
D) would want to be paid a risk premium of $7.50 to avoid facing the two outcomes. 
E) has a risk premium of 10 utils.

Quizplus · Accepted Answer

The Answer of  Figure 5.2
-When facing a 50% chance of receiving $50 and a 50% chance of receiving $100, the individual pictured in Figure 5.2
A) would pay a risk premium of 10 utils to avoid facing the two outcomes. 
B) would want to be paid a risk premium of 10 utils to give up the opportunity of facing the two outcomes. 
C) would pay a risk premium of $7.50 to avoid facing the two outcomes. 
D) would want to be paid a risk premium of $7.50 to avoid facing the two outcomes. 
E) has a risk premium of 10 utils.

Figure 5.2 -When Facing a 50% Chance of Receiving $50 and a and a 50