Refer to the data provided in Table 17.5 below to answer the following question(s). The table shows the relationship between income and utility for Lucy.
Table 17.5
$$\begin{array} { | c | c | }
\hline \text { Income } & \text { Total Utility } \
\hline \$ 0 & 0 \
\hline \$ 10,000 & 10 \
\hline \$ 20,000 & 20 \
\hline \$ 30,000 & 30 \
\hline \$ 40,000 & 40 \
\hline
\end{array}$$
-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 the data provided in Table 17.5 below to answer the following question(s). The table shows the relationship between income and utility for Lucy.
Table 17.5
 $$\begin{array} { | c | c | } 
\hline \text { Income } & \text { Total Utility } \
\hline \$ 0 & 0 \
\hline \$ 10,000 & 10 \
\hline \$ 20,000 & 20 \
\hline \$ 30,000 & 30 \
\hline \$ 40,000 & 40 \
\hline
\end{array}$$
-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.

Quizplus · Accepted Answer

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 the Data Provided in Table 17 -Refer to Table 17