The manager's utility function for profit is U $\pi$)= 10 ln $\pi$),where $\pi$ is the dollar amount of profit.The manager is considering a risky decision with the four possible profit outcomes shown below.The manager makes the following subjective assessments about the probability of each profit outcome: Given this utility function for profit,the utility of profit is
A)equal to 198 for $20,000.
B)increasing as profit gets larger,so the manager is risk-loving.
C)decreasing as profit gets larger,so the manager is risk-averse.
D)both a and b
E)both a and c

Question

The manager's utility function for profit is U $\pi$)= 10 ln $\pi$),where  $\pi$ is the dollar amount of profit.The manager is considering a risky decision with the four possible profit outcomes shown below.The manager makes the following subjective assessments about the probability of each profit outcome:  Given this utility function for profit,the utility of profit is
A)equal to 198 for $20,000. 
B)increasing as profit gets larger,so the manager is risk-loving. 
C)decreasing as profit gets larger,so the manager is risk-averse. 
D)both a and b 
E)both a and c

Quizplus · Accepted Answer

The Answer of The manager's utility function for profit is U $\pi$)= 10 ln $\pi$),where  $\pi$ is the dollar amount of profit.The manager is considering a risky decision with the four possible profit outcomes shown below.The manager makes the following subjective assessments about the probability of each profit outcome:  Given this utility function for profit,the utility of profit is
A)equal to 198 for $20,000. 
B)increasing as profit gets larger,so the manager is risk-loving. 
C)decreasing as profit gets larger,so the manager is risk-averse. 
D)both a and b 
E)both a and c

The Manager's Utility Function for Profit Is U π\piπ )= 10 Ln

The Manager's Utility Function for Profit Is U $\pi$ )= 10 Ln