1. Consider the following lotteries. Lottery A . A1: A loss of $5,000 for certain . A2: A loss of $6,000 with probability 0.9; No change in wealth with probability 0.1 Lottery B . B1: A loss of $5,000 with probability -; No change in wealth with probability ? . B2: A loss of $6,000 with probability 0.3; No change in wealth with probability 0.7. (a) Use ideas from prospect theory to explain why lottery A2 would be preferred to lottery Al. (1-2 sentences) [5 pts] (b) Dabo preferrs lottery A2 to Al and lottery BI to B2. Show that his choices are inconsistent with expected utility theory. [10 pts]