Question

From the appearance of the utility function, we know that 2 a. Britney is risk averse. b. Britney gains less satisfaction when her wealth increases by X dollars than she loses in satisfaction when her wealth decreases by X dollars. c. the property of diminishing marginal utility applies to Britney. d. All of the above are correct.

Answer 1

The correct answer is d. All of the above are correct.

Step-by-step explanation:

The marginal utility function is responsible for measuring the level of consumer satisfaction. In this example it can be denoted that Britney looks for expected results where she does not have to risk, which cannot leave her 100% satisfied but it is a way to be sure of the proposed results. For this reason, a wealth situation can exert a feeling of dissatisfaction in it, and on the contrary, you will be more satisfied when your wealth decreases.