Choose between gambles J and K.

J = ($3,000; 1) (i.e., you will receive $3,000 for sure).

K = ($4,000; 0:8; 0; 0:2) (i.e., you will receive $4,000 with a probability of 0.8, and $0 with a probability of 0.2).

Part 2: Now choose between L and M.

L = ($3,000; 0:25; 0; 0:75) (i.e., you will receive $3,000 with a probability of 0.25, and $0 with a probability of 0.75).

M = ($4,000; 0:20; 0; 0:8) (i.e., you will receive $4,000 with a probability of 0.2, and $0 with a probability of 0.8).

After you make your choices, please think about whether there is any inconsistency in your choices. You can provide your thoughts in the answer section.