This is the whole subject.

3. If his reference point is the status quo, what is the minimum amount of money Richard would be willing to accept instead of receiving a chocolate (that he did not already own)? In other words, if Richard were a chooser, how much money would he demand to compensate for not accepting a chocolate? Richard's preferences over chocolate, c, and money, m, can be represented by the utility function u (c, m) = 6c+m+64 (c-re)+" (m r'm) where rc is his chocolate reference point, I'm is his money reference point, and the function is defined as .. C 0 M (x) = x x