A risk- averse individual will:
A)always enter a risky venture over a particularly risky prospect.
B)enter a risky venture as long as expected utility increases.
C)prefer all certain prospects over a particularly risky prospect.
D)never play a slot machine.

Question

Quizplus · Accepted Answer

Risk-averse individuals are willing to engage in risky ventures if they perceive that the expected utility (a measure of satisfaction or value) from the venture is higher than not participating. This does not mean they always prefer certainty or never engage in gambling-like activities; rather, their participation depends on the expected outcomes aligning with their utility preferences.

A Risk- Averse Individual Will