A person that is risk averse
A) exhibits decreasing marginal utility of wealth.
B) exhibits increasing marginal utility of wealth.
C) always engages in fair bets.
D) loves lotteries.

Question

Quizplus · Accepted Answer

A person who is risk averse exhibits decreasing marginal utility of wealth, which means that as their wealth increases, the additional utility they receive from each additional dollar decreases. This is because they value wealth more when they have less of it, and are willing to pay a premium to avoid risky investments.

A Person That Is Risk Averse