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Arsk averse consumer whose utility is given by UW and wealth is $50,000 is faced with

 Question 84 (25 Points) Arsk averse consumer whose utility is given by U(W) = and wealth is $50,000 is faced with a potential loss of $10,000 with a probability of 01. (a) What is the maximum premium they would be willing to pay to protect themselves against this loss? (b) Suppose utility had been linear in wealth, (W)-W. How will your answer in (a) above change? (c) Suppose tilly had been convex in wealth, U(WW. How will your answer in (a) above change? Question #4 (25 Points) A tisk averse consumer, whose utility is given by U(W) = W® and wealth is $50,000 is faced with a

Jan 05 2020 Read more Less More

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