(b) To buy insurance that pays him $r in case of a flood, Willy must pay an in- surance premium of $0.1x. (The insurance premium must be paid whether or not there is a flood.) If Willy insures for $x, then if there is a flood, he gets $r in insurance benefits. Suppose that Willy has contracted for insur- ance that pays him $r in the event of a flood. Then after paying his insur- ance premium, he will be able to consume CF = If Willy has this amount of insurance and there is no flood, then he will be able to consume CNF =