2. (2 points) Helen has utility function u(a:) = 1:: where '7 = 2. Helen's real income is $37,000. With probability 0.05, she lose $10,000
2. (2 points) Helen has utility function u(a:) = \"1:: where '7 = 2. Helen's real income is $37,000. With probability 0.05, she lose $10,000 due to a car accident. How much is Helen willing to pay to get rid of this risk? That is to nd m such that M37000 m) = 0.05u(27000) + 0.95u(37000)
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