Economics Oscar's utility function is u(x) = if x 2 0, if x

Economics Oscar's utility function is if a: 2 0, ifxSO. Note that is allowed to take on negative values. A positive value is a monetary gain, a negative value is a loss. (a) Is Oscar risk-averse? Explain your answer. Hint: sketch the graph of the function u. (b) Consider the lottery L = (0, -10; 1/2, 1/2), which yields $0 with probability 1/2 and $ 10 with probability 1/2. What is the risk premium that Oscar associates with this lottery? How much is he willing to pay for this lottery?