2. Between Beth and Anh, who do you expect to have a higher willingness to pay for the lottery? (a) They have the same willingness to pay, since they have the same instantaneous utility function and hence the same level of risk aversion. (b) We do not have enough information to answer this question. (0) Anh has higher willingness to pay, because she is richer and thus more risk tolerant. (d) Anh has lower willingness to pay, because she is richer and thus more risk tolerant. (e) Neither Anh nor Beth would ever consider purchasing this lottery anyway, so there is no way to compare their willingness to pay. Background for Questions 1 - 3: Consider a gamble X such that X _ $100 with probability 0.6 $100 with probability 0.4 There are three people who are considering whether to play this gamble: o Anh has an initial wealth of $100, 000 and her instantaneous utility function over nal wealth w is u (w) = J23. 0 Beth has an initial wealth of $10,000 and her utility function is u (w) = V17). 0 Chris has an initial wealth of $200 and his utility function is u (w) = mg. 0 Dalia has an initial wealth of $101 and her utility function is u (w) =