An individual is more likely to reject a risk- pooling arrangement if:
A)he or she experiences rising marginal utility of wealth.
B)he or she is risk loving.
C)he or she is risk averse.
D)he or she experiences decreasing marginal utility of wealth.

Question

Quizplus · Accepted Answer

An individual with rising marginal utility of wealth is more likely to reject a risk-pooling arrangement because they value each additional unit of wealth more than the previous unit. This means that they are less willing to share their wealth with others in a risk-pooling arrangement, as they would rather keep their wealth for themselves.

An Individual Is More Likely to Reject a Risk- Pooling