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Suppose Wu's utility function is given by U(I)=10I, where I represents annual income in thousands of dollars. Show all calculations. 1. By looking at the

image text in transcribed Suppose Wu's utility function is given by U(I)=10I, where I represents annual income in thousands of dollars. Show all calculations. 1. By looking at the utility function, can you tell if Wu is risk loving, risk neutral or risk averse. 2. Suppose that Natasha is currently earning an income of $40,000 and can earn that income next year with certainty. She is offered a chance to take a new job that offers a 0.6 probability of earning $44,000 and 0.4 probability of earning $33,000. calculate his expected utility and the utility of expectation for the new job. 3. Now can you say whether he is risk loving, neutral or averse to risks? why? 4. Should he take the new job? why

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