Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.
A) risk player
B) risk taker
C) risk neutral
D) risk averter

Question

Quizplus · Accepted Answer

The utility function is a straight line, indicating constant marginal utility. This corresponds to a risk-neutral decision maker who is indifferent between guaranteed outcomes and a gamble with the same expected outcome. The best choice for a risk-neutral decision maker is to choose the option with the highest expected value.

Look at the Utility Function Graphed Below and Select the Type