Refer to Table 17.5. From the table, we can see that Lucy is

A) risk-averse.
B) risk-loving.
C) risk-neutral.
D) We cannot determine Lucy's attitude toward risk from the table.

Question

Refer to Table 17.5. From the table, we can see that Lucy isA)  risk-averse.B)  risk-loving.C)  risk-neutral.D)  We cannot determine Lucy's attitude toward risk from the table.

Maggie Smith · Accepted Answer

Final Answer : C, Explanation :  Lucy's utility increases linearly with income, indicating a risk-neutral attitude, as there is a direct, proportional relationship between income and utility without any diminishing or increasing returns to scale.

Refer to Table 17.5. From the table, we can see that Lucy is

A) risk-averse.
B) risk-loving.
C) risk-neutral.
D) We cannot determine Lucy's attitude toward risk from the table.

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Learning Objectives

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