3) Assume that Ailin and Bob have the following value function over exam scores: v(x) = 2x for losses (x < 0) and v(x) = x/2 for gains (x 0) Both of them use the expected exam score as their reference point.

a)Ailin expects to score 75 out of 100 on her upcoming midterm exam. She does better than expected. What is her gain, in terms of value, if her final score is 93?

b)Bob also expects to score 75 out of 100 on his upcoming midterm exam. He does worse than expected. What is his loss, in terms of value, if his final score is 67?

c) Insofar as you use your expectation as a reference point, what does having such value functions say about maximizing value in your life? Should you set high expectations? Should you perform well or poorly in exams?

d)Now, suppose Bob uses Ailin's exam score as a reference point. What would be the value of Bob's loss if Ailin scores 93 and Bob Scores 67? And, what would be the value of Bob's gain if Bob scores 93 and Ailin Scores 67?

e)Insofar as you use other people's exam scores as a reference point, what does having such value functions say about maximizing value in your life?