-Bobby is offered two fulltime jobs. In the first job, as a salesperson, he has a 50 percent chance to make $2,000 a month and a 50 percent chance to make $10,000 a month. The second job, as a construction worker, pays $4,500 a month with certainty. Bobby's utility of wealth curve is shown in the figure above. Bobby will take the ________ job because his expected ________ from this job is greater.
A) first; utility
B) second; utility
C) second; income
D) first; income

Question

-Bobby is offered two fulltime jobs. In the first job, as a salesperson, he has a 50 percent chance to make $2,000 a month and a 50 percent chance to make $10,000 a month. The second job, as a construction worker, pays $4,500 a month with certainty. Bobby's utility of wealth curve is shown in the figure above. Bobby will take the ________ job because his expected ________ from this job is greater.
A) first; utility 
B) second; utility 
C) second; income 
D) first; income

Quizplus · Accepted Answer

Bobby will take the second job because the certainty of $4,500 provides him with greater utility compared to the expected utility from the risky income of the first job.

-Bobby Is Offered Two Fulltime Jobs