Question: (2) Suppose that Mary has a utility function U (c) = x/E, where c is her income she can spend on her consumption goods and

(2) Suppose that Mary has a utility function U (c) = x/E, where c is her income she can spend on her consumption goods and services. Her business is weather dependent. If the weather is good, her income is $80,000. If the weather is bad, her income is only $50,000. The probability of the good weather is 0.4 and the probability of the bad weather is 0.6. Answer each of the following questions. For the numerical answer, answer up to 3 decimal places. (a) What is her expected income? (b) What is her expected utility? (c) If the full insurance is available, what is the maximum price is she willing to pay for that insurance

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