Question
Under expected-utility theory, if a consumer faces two risky alternatives with equal expected monetary income, which criterion generally determines the choice?
The correct answer is
Expected utility of both the alternatives
Expected utility compares the probability-weighted utilities of outcomes. Equal expected incomes need not yield equal expected utilities. Variance alone generally cannot rank lotteries without further restrictions on preferences or distributions; a risk-neutral consumer would be indifferent between equal-mean alternatives.
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Important Questions from Consumer behaviour
In the above diagram, the consumer surplus is represented by the area of :
- Organization responsible for preventing unfair or deceptive trade practices in textile and textile products is :
- The urge to possess and consume for display of wealth is called :
- Which of the following factors favour fashion ?
(a) Leisure
(b) An economy of abundance
(c) Transportation and communication
(d) Low income
(e) Sumptuary laws
Code : - Arrange the following Acts in the ascending order of their years of enactment :
(a) Environmental Protection Act
(b) MRTP
(c) PFA
(d) ISI Certification Marks Act
(e) Air Pollution Act
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