This question explores utility from anticipation and your willingness to pay to avoid a shock.

This question explores utility from anticipation and your willingness to pay to avoid a shock. When you experience it, the shock generates consumption utility v(shock} = v. But your instantaneous utility in any given period depends on both current consumption utility and utility from anticipating future consumption utility. Specically, suppose your instantaneous utility in period t is \"t = \"(00 + lv(0t+1) + v(c+2)]. Note: This model is slightly different from the one used in class. Suppose your period-t intertemporal utility is Ut = U: + 5U+1 +52U+2 + Finally, suppose that your utility from money is linear. Hence, if you are asked in period t to state your willingness to pay now to avoid receiving a shock in period 1' 2 t, and if your period-t intertemporal utility from receiving the shock in period 7 would be U l (T)