What would best explain why a generally risk-averse person would bet $100 during a night of blackjack in Las Vegas?
A. Risk aversion relates to income choices only, not expenditure choices.
B. Risk averse people may gamble under some circumstances.
C. The economics of gambling and the economics of income risk are two different things.
D. Risk-averse people attach high subjective probabilities to favorable outcomes, even when objective probabilities are known.
Answer:B
What would best explain why a generally risk-averse person would bet $100 during a night of blackjack in Las Vegas?
A. Risk aversion relates to income choices only, not expenditure choices. B. Risk averse people may gamble under some circumstances. C. The economics of gambling and the economics of income risk are two different things. D. Risk-averse people attach high subjective probabilities to favorable outcomes, even when objective probabilities are known.