Question: help me answer the question I 3.21 Utility functions need not relate to dollar values. Here is a problem in which we know lit- tie

help me answer the question

help me answer the question "I 3.21 Utility functions need not relate

"I 3.21 Utility functions need not relate to dollar values. Here is a problem in which we know lit- tie about ve abstract outcomes. What is important. however, is that a person who does know what A to E represent should be able to compare the outcomes using the lottery procedures We hairs studied. A decision maker faces a risky gamble in which she may obtain one of ve outcomes. Label the outcomes A, B, C, D, and E. A is the most preferred, and E is least preferred. She has made the following three assessments. ' She is indifferent between having C for sure or a lottery in which she wins A with probability 0.5 or E with probability 0-5. " She is indifferent between having B for sure or a lottery in which she wins A with probability 0.4 or C with probability 0.6. ' She is indifferent between these two lotteries: l: A 50% chance at B and a 50% chance at D 2: A 50% chance at A and a 50% chance at E What are U04), ULB), U(C), U(D), and U(.E'}

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