Given the new job in (b), would Emma be willing to buy insurance to protect against the variable income associated with the new job? If so, how much would she be willing to pay for that insurance?Explain
Q1. Emma’s utility function is given by 𝑈(𝐼) = √10 𝐼, where 𝐼 represents her annual income in thousands of Euros. To understand Emma’s attitude toward risk without knowing her income we shall input an income of €10,000 into the given formula and will progressively increase it by €10,000 till there is enough data to […]