health economics

A consumer has wealth of I=$100 and faces a 50% probability that he will require a surgical procedure which costs $64. He behaves as if he maximizes his expected utility and his utility lnction is U(1) = I\"2 What is the maximum price this consumer is willing to pay for full insurance? Show your work (10 points) Calculate risk premium for this consumer. Should he/she buy health insurance if loading fee is $2? (10 points) The model above ignores the possibility of moral hazard. Verbally explain how your answer in (b) may change if we relax that assumption. (5 points)