Why does the assumption of diminishing marginal utility of income imply risk aversion? Can you think of

Question:

Why does the assumption of diminishing marginal utility of income imply risk aversion? Can you think of other assumptions that would result in risk-averse behavior (such as the purchase of insurance) but would not require the difficult to verify notion of diminishing marginal utility?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Microeconomics and Its Application

ISBN: 978-1133189039

12th edition

Authors: Walter Nicholson, Christopher M. Snyder

Question Posted: