A person's utility is determined by the preferences they exhibit for decision choices involving __________.
A)certainty
B)uncertainty
C)risk
D)Bayes' Theorem
E)optimism

Question

Quizplus · Accepted Answer

Utility theory deals with decision-making under conditions of risk. The utility of a person is determined based on the preferences they exhibit for decision choices involving risk. Certainty and uncertainty are related to risk, but risk is a more specific term in this context. Bayes' Theorem is a concept related to probability, not utility theory. Optimism is not directly related to utility theory.

A Person's Utility Is Determined by the Preferences They Exhibit