Find out the utility and the ratio of utility.
1. If the payoff from outcome A is twice the payoff from outcome B, then the ratio of these utilities will be
a. . 2 to 1.
b. less than 2 to 1.
c. more than 2 to 1.
d. unknown without further information.
2. A decision maker has chosen 0.4 as probability for which he cannot choose between a certain loss of 10,000 and the lottery p(-25000) + (1-p)(5000). If the utility of -25,000 is 0 and of 5000 is 1, then the utility of -10,000 is
a. .5
b. .6
c. .4
d. 4