1. [5 points] In the basic model of demand for insurance in competitive markets, consumers may prefer partial and actuarially unfair insurance to full and actuarially unfair insurance. 2. [5 points] Jimmy owns a lottery ticket that has a 50% chance of winning $1000 (and a 50% chance of paying nothing). Because Jimmy is risk averse, with preferences consistent with the utility function graphed below, he is indifferent between owning the lottery ticket or owning $400 in cash. True or false: if the probability of the lottery ticket winning decreases to 25%, Jimmy will be willing to sell the lottery ticket for $150. [Hint: You do not have enough information to calculate the precise value at which Jimmy is willing to sell his ticket. However, you can determine if it is more or less than $150.] Ull)