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Chapter 15 Section Reviews 15.3
Quiz Content
*
not completed
.
Studies of the greater weight of loss (λ > 1).suggest that there is [___] variability in λ across individuals.
a modest amount
correct
incorrect
little
correct
incorrect
substantial
correct
incorrect
*
not completed
.
Consider a gain lottery with a 50 percent chance of winning $60. Rudy's certainty equivalent is $15, and Newt's certainty equivalent is $30. Plausible values for the utility parameter μ are [___] for Rudy and [___] for Newt.
0.80, 0.20
correct
incorrect
0.50, 1
correct
incorrect
1, 0.50
correct
incorrect
*
not completed
.
Consider a gain lottery with a 50 percent chance of winning $60. Mid's certainty equivalent is $24. A plausible value for the utility parameter μ is [___].
1
correct
incorrect
0.75
correct
incorrect
0.25
correct
incorrect
0.50
correct
incorrect
*
not completed
.
Consider a loss lottery with a 50 percent chance of losing $40. Rudy's certainty equivalent is –$10, and Newt's certainty equivalent is –$20. Plausible values for the utility parameter μ are [___] for Rudy and [___] for Newt.
0.50, 1
correct
incorrect
1, 0.50
correct
incorrect
0.80, 0.20
correct
incorrect
*
not completed
.
Use Widget 15.3. Suppose an individual is willing to pay $40 for a 50 percent chance of a $100 gain. The implied value of the utility parameter is μ = [___].
0.50
correct
incorrect
0.76
correct
incorrect
1
correct
incorrect
0.24
correct
incorrect
*
not completed
.
Consider an experiment that used the bisection method to test for decreasing sensitivity. The low stimulus is 10 and the high stimulus is 40. We conclude that a subject has decreasing sensitivity if he or she chooses an intermediate stimulus [___].
greater than 25
correct
incorrect
less than 25
correct
incorrect
equal to 25
correct
incorrect
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