Sally Kink Is an Expected Utility Maximizer with Utility Function

Question 12
Multiple Choice

Sally Kink is an expected utility maximizer with utility function pu(c1) + (1 - p)u(c2), where for any x < 6,000, u(x) = 2x, and for x greater than or equal to 6,000, u(x) = 12,000 + x. A) Sally will be risk neutral if her income is less than $6,000 and risk averse if her income is more than $6,000. B) Sally will be risk averse if her income is less than $6,000 but risk loving if her income is more than $6,000. C) For bets that involve no chance of her wealth exceeding $6,000, Sally will take any bet that has a positive expected net payoff. D) Sally will never take a bet if there is a chance that it leaves her with wealth less than $12,000. E) None of the above.