1.Use the income, utility, income loss due to sickness, and probability of sickness from the above example. Now consider the effect of insurance. You can get full insurance, which would completely cover the cost of sickness, for a premium of $500. What would be your expected utility if you purchased insurance?

a. sqrt(4900-500)=66.33

b. sqrt(4900-500)*.8+ sqrt(2500-500)*.2=62.01

c. sqrt(4900+500)=73.49

d. sqrt(4900-500)*.2+sqrt(2500-500)*.8=49.04