Chapter 15 Section Reviews 15.1

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. The features of prospect theory include [___].

decreasing sensitivity correct incorrect

greater weight of loss correct incorrect

total wealth
correct incorrect

gains and losses correct incorrect

increasing sensitivity correct incorrect

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. Using Figure 15.2 as a starting point, suppose the gain is $400 (instead of $900) and the loss is $4 (instead of $64). The monetary value of the lottery is $[___] and the utility value of the lottery is [______] utils.

202, 11 correct incorrect

190, 8
correct incorrect

200, 10 correct incorrect

198, 9 correct incorrect

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. Using Figure 15.2 as a starting point, suppose the gain is $400 (instead of $900) and the loss is $4 (instead of $64). The certainty equivalent of the lottery is c(L) = $[___].

64
correct incorrect

81 correct incorrect

121 correct incorrect

100 correct incorrect

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. Use Widget 15.2. Suppose μ = 0.70 and λ = 1.50. The certainty equivalent of the lottery is c(L) = $[___].

69 correct incorrect

75 correct incorrect

93 correct incorrect

80 correct incorrect