Assume your utility function is the cube root. Just as in the previous problem, you have initial wealth of $10k, and are facing the prospect of either losing $1k with certainty, or taking a gamble and either losing $2k or $0, with a 50-50 chance.

Let's frame this in terms of prospect theory, where you take your starting point as zero, and focus on just your gains or losses.

In this case, what is the difference in expected utility between the certain outcome and the uncertain gamble?

Hint: Just as before, calculate utility of certain loss, the expected utility of uncertain loss, subtract.

Think which you would prefer.