Question 1. Suppose Alice is considering a lottery that pays $1 in state 1 and that pays 22 in state 2. States 1 and 2 are equally likely, i.e., each occurs with probability 1/2. Alice maximizes expected utility with u(@) = vo, i.e., Alice maximizes v@1+ 7V22. 1.1 /7 points/ Is Alice risk averse, risk neutral, or risk seeking? Explain. 1.2 /10 points Consider a lottery that pays 4 in state 1 (so x1 = 4) and that pays 0 state 2 (so *2 = 0). What is the expected value of this lottery? What is its expected utility? What is the certainty equivalent of the lottery