Figure 144

Example of a Money/Utility Relation

A risk seeker's marginal utility of money increases. A risk-indifferent individual has a constant marginal utility of money. A risk averter displays a diminishing marginal utility of money.

Total utility

Increasing marginal utility of money: risk seeker

C Constant marginal utility of money:

indifferent to risk

Diminishing marginal utility of money: risk averter

B/

Was this article helpful?

0 0
Your Retirement Planning Guide

Your Retirement Planning Guide

Don't Blame Us If You End Up Enjoying Your Retired Life Like None Of Your Other Retired Friends. Already Freaked-Out About Your Retirement? Not Having Any Idea As To How You Should Be Planning For It? Started To Doubt If Your Later Years Would Really Be As Golden As They Promised? Fret Not Right Guidance Is Just Around The Corner.

Get My Free Ebook


Post a comment