4. A decision-maker must choose between two lotteries, L1 and L2. The lottery L1 gives 0 dollars with probability 1/4 and 20 dollars with probability 3/4, whereas L2 gives 12 dollars for sure. The decision-maker is an expected utility maximizer with utility u(w), where w is the change in the consumers wealth. Assume that u() is continuous and strictly increasing. (a) Suppose that the decision-maker is risk averse. Can you determine which lottery she will choose? (b) Suppose that someone who knows the outcome of the lottery L1 is willing to sell the information to the decision-maker. If the decision-maker is risk neutral, how much would she be willing to pay to know the outcome of lottery L1 before making her choice between L1 and L2 ? (c) Suppose that the decision-maker is risk loving and, as in (b), she can buy information about the outcome of lottery L1 prior to making her choice between L1 and L2. Is she willing to pay a positive amount to know the outcome of the lottery