A decision maker has a utility function $U = I ^ { 2 } + 500$ . This decision maker is
A) risk-averse.
B) risk-neutral.
C) risk-loving.
D) risk-gaining.

Name: A decision maker has a utility function $U = I ^ { 2 } + 500$ . This decision maker is A) risk-averse. B) risk-neutral. C) risk-loving. D) risk-gaining.
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Question

Quizplus · Accepted Answer

The utility function $U = I^2 + 500$ is convex, indicating that the decision maker derives increasing marginal utility from wealth, which is characteristic of a risk-loving individual.

A Decision Maker Has a Utility Function U=I2+500U = I ^ { 2 } + 500U=I2+500

A Decision Maker Has a Utility Function $U = I ^ { 2 } + 500$