Question: (4) A person has the utility function u(w) = log10(w). She has initial wealth of $10,000 and has become a finalist in a lottery such

(4) A person has the utility function u(w) = log10(w). She has initial wealth of $10,000 and has become a finalist in a lottery such that her ticket will pay off $990,000 with probability 1/2, and $0 with probability 1/2. What is the minimum amount of money she would be willing to receive in exchange for the ticket? (Hint: Certainty equivalent.) (A) 90,000 (B) 85,000 (C) 80,000 (D) 82,000

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