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Suppose that an agent is offered money: she can choose any dollar amount upto $M. We see that she chooses C ( { 0 ,

Suppose that an agent is offered money: she can choose any dollar amount upto $M. We see that she chooses

C({0, 1, ..., M}) = {M}.

Show by example that this choice can be explain equally well by (i) utility maximization with diminishing marginal utility for money, and (ii) utility max imization with increasing marginal utility for money.

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