Solved: Explain why the assumptions imply infinite risk aversion, Microeconomics

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Explain why the assumptions imply infinite risk aversion

Problem

Suppose that consumption when it's sunny and consumption when there's a hurricane are perfect complements. The investor's indifference curves are L-shaped, and the corner of each L lies on the 45-degree line. Using graphs, explain why these assumptions imply infinite risk aversion.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Explain why the assumptions imply infinite risk aversion

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