An individual's preference is characterized by the increasing marginal utility function.Identify the risk attitude of this individual.
A)Risk biased
B)Risk averse
C)Risk hating
D)Risk neutral
E)Risk seeking

Question

Quizplus · Accepted Answer

An increasing marginal utility function indicates that the individual derives more satisfaction from each additional unit of consumption, which is characteristic of a risk-seeking attitude. This is because they value potential gains more highly, even if those gains come with higher risks.

An Individual's Preference Is Characterized by the Increasing Marginal Utility