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Suppose your utility function for income that takes the form U(I)=I , and you are considering a self-employment opportunity that may pay $10,000 per year
Suppose your utility function for income that takes the form U(I)=I
, and you are considering a self-employment opportunity that may pay $10,000 per year or $40,000 per year with equal probabilities. What certain income would provide the same satisfaction as the expected utility from the self-employed position?
Group of answer choices
$15,000
$25,000
$22,500
$27,500
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