list pays flow with chsure 3/5 and S200 with chance 2/5. 1al Calculate the expected wine of the grub.e. Expected Yale: EV = 3 x 100 + 2 x 200 = 140 iby Calendar the: miley that this consumer would attain if he was a revive with arity the dont win milevabud 's part as. That is, what is the utility of the is apled calm of he yanked U(EV) = U(140) = 1402 = 19600 (c) Now sale date : Ya expected ulilly a" the gamble. EU = U(100) + U(200) = 10000 + 40000 = 6000 + 16000 = 22000 (d) Compare your answer in part hi in your answer in part ) and use this comparison to draw s conclusion Boout this consumer's risk preferences. EU > U(EV) - The pauper 's risk king. We could alan have reached this conclusion hy evaluating : be seen'd derivative ni U(w). U"(w) = w2 0'UW) - 2 > 0: The marginal neicy of wealth is increasing in wealth. So, was cousumner is risk loving. to Calculate the certainty equivalent of the gambiv. Wake that the conuna pubs E.T. of 2200 from Me pourbake. The amman of ramey with me ainly cher would yield :his utilize is the certainty equivalent:Ck; of the gamble. So, we know cher U(CE) = CE2 = 22000 - CE = 148.32