can you solve part d. Question 1 A risk averse individual faces uncertainty with two outcomes: good, bad. The individual has income S560 under good and $350 under bad outcome. The probability of good outcome is 4/7 (so the probability of bad outcome is 1 - 4/7 = 3/7). The individual can buy any non-negative x units of insurance. Every unit of insurance has price $p and it pays $1 in the event of bad outcome. In this insurance market, the unit price of insurance is known to be p = 1/2 (a) (2 points) Determine if the insurance market is competitive or not. (6) 16 points) Suppose the individual buys x units of insurance, Determine the individual's net income under good income, net income under bad income and the average net income, Draw these three in a diagram as functions of x. () [6 points) For the individual: (i) compare full insurance with over insurance and (ii) compare full insurance with partial insurance. Then determine best choice of insurance for the individual. (a) [6 points) Consider the same problem, but suppose the individual is risk neutral instead of risk averse. Determine best choice of insurance for the individual