Sam's car has just been valued at $37,000.00. Sam knows that, with probability 0.70, he might have an accident that would decrease the value of the car by $13,000.00. Sam's utility over the value of the car (in terms of money) is ()=u(m)=m. Sam can decide whether to insure the car against the loss. Each dollar of insurance bought costs

Sam's car has just been valued at $37,000.00. Sam knows that, with probability 0.70, he might have an accident that would decrease the value of the car by $13,000.00. Sam's utility over the value of the car (in terms of money) is u(m) = /m. Sam can decide whether to insure the car against the loss. Each dollar of insurance bought costs y ,with 0