solve this please
6) A consumer with the opportunity to buy insurance has an expectel utility function of the form EU = (1 - a) In(1-P) + a In(I-L-P+ R), where P = xR. a) Find an expression for the utility maximizing level of R. b) Verify by finding the second order condition that the solut on for R represents a global maximum. c) If insurance is fair, what does R become according to the expression of part a? d) Find AR What value does this take when insurance is not fair? What ai value does it take when insurance is fair? In each case, car you explain the OR value of 2 ar OR OR e) Explain why we should have when insurance is fair. da. 6) A consumer with the opportunity to buy insurance has an expectel utility function of the form EU = (1 - a) In(I - P) + a ln(1 - L - P + R), where P = xR. a) Find an expression $r the utility maximizing level of R. b) Verify by finding the second order condition that the solut on for R represents a global maximum. c) If insurance is fair, what does R become according to the expression of parta? OR d) Find What value does this take when insurance is not fair? What al value does it take when insurance is fair? In each case, car you explain the OR value of ? al OR AR e) Explain why we should have when insurance is fair. ax 6) A consumer with the opportunity to buy insurance has an expectel utility function of the form EU = (1 - a) In(1-P) + a In(I-L-P+ R), where P = xR. a) Find an expression for the utility maximizing level of R. b) Verify by finding the second order condition that the solut on for R represents a global maximum. c) If insurance is fair, what does R become according to the expression of part a? d) Find AR What value does this take when insurance is not fair? What ai value does it take when insurance is fair? In each case, car you explain the OR value of 2 ar OR OR e) Explain why we should have when insurance is fair. da. 6) A consumer with the opportunity to buy insurance has an expectel utility function of the form EU = (1 - a) In(I - P) + a ln(1 - L - P + R), where P = xR. a) Find an expression $r the utility maximizing level of R. b) Verify by finding the second order condition that the solut on for R represents a global maximum. c) If insurance is fair, what does R become according to the expression of parta? OR d) Find What value does this take when insurance is not fair? What al value does it take when insurance is fair? In each case, car you explain the OR value of ? al OR AR e) Explain why we should have when insurance is fair. ax
