Question 2: Jo’s utility function for gambles is given by the expected value of the square root of c where c is her consumption. If she doesn’t gamble,

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Question 2: Jo’s utility function for gambles is given by the expected value of the square root of c where c is her consumption. If she doesn’t gamble, she will have $900 for sure. She is offered a gamble that depends on the toss of a fair coin. She will have a consumption of $100 if she loses and $1600 if she wins. Should she take this gamble? A Yes B No

Question 1 Bill’s preferences over gambles are represented by the expected value of u(x) where u(x)=x2 where x is his consumption. Bill is a risk averter. A True B False