8. Consider the diagram below, studied in class, depicting the utility function U of John, whose decisions adhere to the standard model of utility under uncertainty. The y-axis denotes his level of utility, while the x-axis represents his income, within a single time period. John faces a 25% chance of falling ill during this period. In the event of good health, he earns $2000, denoted by I3 on the graph. However, if he falls ill, his income decreases to $200 due to medical expenses, indicated by I1 on the graph. a. What does I2 refer to, and what is its value? Explain. (5 points) b. U2 is higher than U1 only if John doesn't get sick. True or False? Explain. (5 points) c. The risk premium of insurance contract C is higher than that of insurance contract E. True or False? Explain. (5 points) d. Insurance contract E is said to be unfair but full. True or False? Explain. (5 points)