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Questions › CUET-PG › CUET-PG 2024 › Q16
4 marks, −1Microeconomics › Choice under uncertainty › Risk aversion, certainty equivalent and risk premiumModerateabout 1 min

CUET-PG 2024 Question 16: Choice under uncertainty

If a consumer definitely prefers a payment of INR 90 for sure to a lottery which promises rewards of INR 100 or INR 0 with probabilities of 1/2 each, then we can say that the consumer is

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Answer and worked solution

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Choice under uncertainty has come up 27 times in 7 exams since 2007.

What this question tests

This question is on Risk aversion, certainty equivalent and risk premium, part of Choice under uncertainty in Microeconomics.

How the shape of utility reveals attitude to risk and how much a person would pay to avoid it.

TestStop has 16 past-paper questions on this subtopic; the nearest in year are below.

  • GATE 2021 · Q13Piku faces a lottery with outcomes of ₹24, ₹12, ₹48 and ₹6 given by the following probability distribution |…
  • IIT JAM 2021 · Q13The utility from wealth is u(w) = √w. An individual owns a risky asset that is equally likely to yield Rs.…
  • GATE 2021 · Q16Consider an individual who maximizes her expected utility having Bernoulli utility function u(w)=α-β…
Take this paper as a timed mockMore on Risk aversion, certainty equivalent and risk premium

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Question from the CUET-PG 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.