(b) Suppose that there is a large group of individuals (consumers) all with identical utility functions over wealth u(w), and initial wealth given by w = wo. Some of the individuals have a probability pz (low-risk) of incurring a health-related loss of size L and others have a probability pa (high-risk) of incurring the same loss. More specifically, a proportion q = 1/2 of the individuals have p = PL, and the remainder 1 - q have p = py. Assume that 0