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Problem 18.1.4 Suppose that half the population is healthy and the other half is unhealthy. The cost of getting sick is $1,000 for healthy people

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Problem 18.1.4 Suppose that half the population is healthy and the other half is unhealthy. The cost of getting sick is $1,000 for healthy people and $10,000 for unhealthy people. In a given year, any one person (regardless of health) either becomes sick or does not become sick. The probability that any one person gets sick is 0.4. Each person's utility of wealth function is U(Y) = Y\

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