1.3 Another firm offers Lou a job with no risk. How much end-of-summer wealth would Lou need from that job for him to take it in preference to the risky lawn-mowing job?

Lou is offered a risky summer lawn-mowing job. If he takes this job, there is a 50 per cent chance that at the end of the summer he will have £5,000 and a 50 per cent chance that he will have only £1,000. The table shows Lou’s utility from his end-of-summer wealth.

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Wealth (pounds) Utility (units) 1,000 8 2,000 14 3,000 17 4,000 19 5,000 20 6.000 21