Question 3 [20 marks) Consider two utility functions u(x) and ū(x) where x is the amount of money consumed by the agent.
Posted: Thu May 19, 2022 8:25 am
- Question 3 20 Marks Consider Two Utility Functions U X And U X Where X Is The Amount Of Money Consumed By The Agent 1 (14.62 KiB) Viewed 74 times
Question 3 [20 marks) Consider two utility functions u(x) and ū(x) where x is the amount of money consumed by the agent. a) Explain formally what it means that an agent with utility function u is more risk averse than an agent with utility function u. b) Show that an agent with utility function (x) = log .r is more risk averse than an agent with utility function u(x) = V.