Refer to the data provided in Table 17.4 below to answer the following question(s). The table shows the relationship between income and utility for Celeste.
Table 17.4
$$\begin{array} { | c | c | }
\hline { \text { Income } } & \text { Total Utility } \
\hline \$ 0 & 0 \
\hline \$ 40,000 & 50 \
\hline \$ 80,000 & 90 \
\hline \$ 120,000 & 120 \
\hline \$ 160,000 & 140 \
\hline
\end{array}$$
-Refer to Table 17.4. From the table, we can see that Celeste is
A) risk-averse.
B) risk-loving.
C) risk-neutral.
D) We cannot determine Celeste's attitude toward risk from the table.

Question

Refer to the data provided in Table 17.4 below to answer the following question(s). The table shows the relationship between income and utility for Celeste.
Table 17.4
 $$\begin{array} { | c | c | } 
\hline  { \text { Income } } & \text { Total Utility } \
\hline \$ 0 & 0 \
\hline \$ 40,000 & 50 \
\hline \$ 80,000 & 90 \
\hline \$ 120,000 & 120 \
\hline \$ 160,000 & 140 \
\hline
\end{array}$$
-Refer to Table 17.4. From the table, we can see that Celeste is
A) risk-averse.
B) risk-loving.
C) risk-neutral.
D) We cannot determine Celeste's attitude toward risk from the table.

Quizplus · Accepted Answer

Celeste's utility increases at a decreasing rate as her income increases, indicating diminishing marginal utility of income, which is characteristic of a risk-averse individual.

Refer to the Data Provided in Table 17 -Refer to Table 17