Question: This is the whole subject. 3. If his reference point is the status quo, what is the minimum amount of money Richard would be willing

This is the whole subject. 3. If his reference point is the status quo, what is the minimum amount of money Richard would

This is the whole subject.

3. If his reference point is the status quo, what is the minimum amount of money Richard would be willing to accept instead of receiving a chocolate (that he did not already own)? In other words, if Richard were a chooser, how much money would he demand to compensate for not accepting a chocolate? Richard's preferences over chocolate, c, and money, m, can be represented by the utility function u (c, m) = 6c+m+64 (c-re)+" (m r'm) where rc is his chocolate reference point, I'm is his money reference point, and the function is defined as .. C 0 M (x) = x x

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