1. Assume an individual has income of $100,000, and has a 5% chance of incurring a $100,000 loss due to an adverse medical event. His utility function is represented by: U=C14.

In these problems, you are given income in different "states of the world". From there, you assume the price of consumption goods is $1 per unit.

In this set-up, how many units of consumption goods could you buy if there is NOT an adverse medical event?