Other things equal, expected income can be used as a direct measure of well-being:
A) always.
B) no matter what a person's preference to risk.
C) if and only if individuals are not risk-loving.
D) if and only if individuals are risk averse.
E) if and only if individuals are risk neutral.

Question

Quizplus · Accepted Answer

Expected income can be used as a direct measure of well-being if and only if individuals are risk neutral. This is because risk-neutral individuals value income based on its expected value, without concern for the variability or risk associated with different income streams.

Other Things Equal, Expected Income Can Be Used as a Direct