Quincy's expected utility function is pc ₁ + (1 - p) c
₂, where p is the probability that he consumes c₁ and 1 - p is the probability that he consumes c₂. Wilbur is offered a choice between getting a sure payment of $Z or a lottery in which he receives $3,600 with probability .60 and $12,100 with probability .40. Wilbur will choose the sure payment if

Question

Quincy's expected utility function is pc ₁ + (1 - p)c ₂, where p is the probability that he consumes c₁ and 1 - p is the probability that he consumes c₂. Wilbur is offered a choice between getting a sure payment of $Z or a lottery in which he receives $3,600 with probability .60 and $12,100 with probability .40. Wilbur will choose the sure payment if A) Z > 6,400 and the lottery if Z < 6,400. B) Z > 12,100 and the lottery if Z < 12,100. C) Z > 9,250 and the lottery if Z < 9,250. D) Z > 5,000 and the lottery if Z < 5,000. E) Z > 7,000 and the lottery if Z < 7,000.

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The Answer of Quincy's expected utility function is pc ₁ + (1 - p)c ₂, where p is the probability that he consumes c₁ and 1 - p is the probability that he consumes c₂. Wilbur is offered a choice between getting a sure payment of $Z or a lottery in which he receives $3,600 with probability .60 and $12,100 with probability .40. Wilbur will choose the sure payment if A) Z > 6,400 and the lottery if Z < 6,400. B) Z > 12,100 and the lottery if Z < 12,100. C) Z > 9,250 and the lottery if Z < 9,250. D) Z > 5,000 and the lottery if Z < 5,000. E) Z > 7,000 and the lottery if Z < 7,000.

Quincy's Expected Utility Function Is Pc 1

Quincy's Expected Utility Function Is Pc ₁