John's utility from an additional dollar increases more when he has $1,000 than when he has $10,000.From this,we can conclude that John
A) is risk averse.
B) is risk loving.
C) is risk neutral.
D) has a negative marginal utility of wealth.

Question

Quizplus · Accepted Answer

John's increasing utility from an additional dollar when he has less money is characteristic of diminishing marginal utility of wealth, a key trait of risk aversion. Risk-averse individuals value each additional dollar more when they have less money, reflecting a concave utility function.

John's Utility from an Additional Dollar Increases More When He