Suppose Travel Guard flight insurance, which provides surviving family members $200000 if a passenger is killed on a ight. sells for $23. If the probability of being in a crash were as high as the frequency in 2001, 000000077, what would be a fair price? The price of fair flight insurance is $ . (Enter your response rounded to three decimal pieces.) Use a graph to illustrate why a risk averse person might buy unfair insurance. Show on the graph the risk premium that the person would be willing to pay. Suppose the gure to the right shows a passenger's utility from income of $0 (point a), utility from income of $200,000(point b), and expected utility from a 0000000027 probability of receiving $200,000 and a 099999923 probability of receiving $0.00 (point c). 1.} Using the line drawing tool, show the actual risk premium on the graph. Label this line 'Risk premium.' 2.} Using the point drawing tool, identify a point that corresponds to a perceived expected value and a perceived expected utility from insurance by a risk averse person such that she purchases flight insurance that is unfair. Label this point 'd.' Carefuti'y follow the instructions above, and only draw the required objects. U(200,000] Utility, U U(0154)- 0.154 200 .000 Wealth