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Let Y represent the amount an individual spends on a trip. The individual's utility is a function of how much she actually spends on the
Let Y represent the amount an individual spends on a trip. The individual's utility is a function of how much she actually spends on the trip, given by U(Y) = (In Y) * 1000. The individual plans to spend $10,000 on the trip, but there is a possiblity that some of the money will be lost. Suppose the individual's expected utility for the trip of 9,131.32, without insuring against the possible loss of money. The maximum wholedollar amount this individual would spend to insure against the loss of money would be $[p]. (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero andtrailing zeros when needed. Use a period for the decimal separator and a comma to separate groups of thousands.)
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