A consumer who is risk neutral is best characterized as ________.
A) a consumer who may accept a risky prospect even if the expected gain is negative
B) a consumer who demands a positive expected gain as compensation for taking risk
C) a consumer who completely ignores risk and makes his or her decisions based solely on expected values
D) None of the above

Question

Quizplus · Accepted Answer

A risk neutral consumer completely ignores risk and solely makes decisions based on expected values. They do not demand compensation for taking on risk or accept negative expected gains.

A Consumer Who Is Risk Neutral Is Best Characterized as ________