By studying a person's Utility Curve, one can determine whether the individual is a risk seeker, risk avoider, or is indifferent to risk.

Question

Quizplus · Accepted Answer

This statement is true. A utility curve shows how much satisfaction or utility a person derives from different levels of wealth, and by analyzing the curve, one can determine the individual's attitude towards risk. If the curve is relatively flat, the person is risk-averse; if it is steep, the person is a risk-seeker; and if it is linear, the person is indifferent to risk.

By Studying a Person's Utility Curve, One Can Determine Whether