Refer to the information provided in Figure 17.1 below to answer the question(s) that follow. Figure 17.1
-Refer to Figure 17.1. Suppose John's utility from income is given in the figure. From this we would say that John is
A) risk-neutral.
B) risk-averse.
C) risk-loving.
D) a risk taker.

Question

Refer to the information provided in Figure 17.1 below to answer the question(s) that follow.  Figure 17.1
-Refer to Figure 17.1. Suppose John's utility from income is given in the figure. From this we would say that John is
A) risk-neutral. 
B) risk-averse. 
C) risk-loving. 
D) a risk taker.

Quizplus · Accepted Answer

John is risk-averse because his utility from income increases at a decreasing rate, indicating he values each additional unit of income less than the previous one, a characteristic of risk aversion.

Refer to the Information Provided in Figure 17