A risk- inclined individual is characterized by a utility function that exhibits:
A)falling marginal utility of wealth.
B)falling total utility of wealth.
C)constant marginal utility of wealth.
D)rising marginal utility of wealth.

Question

Quizplus · Accepted Answer

A risk-inclined individual is willing to take more risk in exchange for the potential of higher returns. This implies that they would have a preference for a higher marginal utility of wealth, which is represented by a rising utility function. Therefore, choice D is the correct answer.

A Risk- Inclined Individual Is Characterized by a Utility Function