1. AconsumerhasauhlitylnctioncfincomeYofthefonn:

1 _ A consumer has a utility ftnction of Income Y of the form: 50*Y Furthermore, her demand for medical care Q is:e-' 300- 6PP A healthy consumer is endowed with 150 units of medical care, the value of which is added to their income, and receives no additional value from consuming more care The dollar cost per unit of medical care is set at S25_ Without insurance, the consumer faces a price of P S25_ The probability that she will become ill is 15. Her cument Income Ovithoutthehealth Z 'value' described above) is SIO,OOO_ Further, assume that it takes 150 units of medical care to restore an "ill" consumer to "healthy." In addition, once at the doctor, a sick person may elect more medical care than would just make them healthy, an opportunity that is not available to naturally healthy consumers. The value of all medical care is added to income when calculating utility Thus, the utility level in each state (sick or ill) depends on the income level aner medical expenses and premiums, supplemented by any consumer surplus from medical care (or its equivalent endowed value). (The sick consumer will always choose at least enough medical care to restore her health.) a. First, assume that the consumer has no opportunity to purchase medical care services. What is the consumer' s expected utility (numerical value)?e