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. We would say that Dmitri is risk averse based on his
A) income potential.
B) utility from income.
C) present income.
D) past income.

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. We would say that Dmitri is risk averse based on his
A) income potential. 
B) utility from income. 
C) present income. 
D) past income.

Quizplus · Accepted Answer

Risk aversion is determined by the shape of an individual's utility function with respect to income, not by the level of income itself. A risk-averse individual has a concave utility function, indicating that the utility gained from an additional dollar of income decreases as income increases.

Refer to the Information Provided in Figure 17