If an individual is risk averse, we would expect their marginal utility to _____ as income _____.

Question

Quizplus · Accepted Answer

If an individual is risk averse, they have a diminishing marginal utility of wealth, meaning their satisfaction or utility from receiving an additional unit of income decreases as their income increases. This is because the more income they have, the less they value additional income due to their aversion to risk.

If an Individual Is Risk Averse, We Would Expect Their