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Suppose an individual faces a risk of an illness that would cost $10,000 in medical bills. The individual has a 20% chance of getting the
Suppose an individual faces a risk of an illness that would cost $10,000 in medical bills. The individual has a 20% chance of getting the illness and an income of $100,000 if the illness does not occur. Suppose utility is equal to the square root of income (you can write this as U = sqrt(Y)). Write out the equations for EU and U(E(Y)) for this example. No need to sole for numerical answer
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