Clear solutions please

Problem3 An individual's value function is given by v(x) = 3x for gains and 1200 = 6|x| for losses of 2: (measured in consumption levels of the two goods x, x = y,zl. Furthermore, 12(0) = 0 holds. a) b) c) d) e) fl Depict the value function in a suitable graph. (3 points) Show that the individual is loss averse (in the sense that she suffers more from losing 5 units than she benets from gaining 5 units). (2 points) Depict the individual's indifference curves, starting from (1) the bundle A: (y = 12, z = 6) and (2) the bundle B: (y = 6, z = 12). (3 points) Suppose that the individual is initially endowed wi1 bundle A. Show analytically that she will not be willing to exchange bundle A for bundle B. (2 points) Suppose that the individual is initially endowed with bundle B. Show analytically that she will not be willing to exchange bundle B for bundle A. (2 points) As you know from neoclassical theory, two "standard" convex indifference curves of an individual do never intersect. Discuss why the two indifference curves from problem c) intersect. (4 points) The standard version of prospect theory as suggested by Kahneman and Tversky (1979) entails diminishing sensitivity. Describe the concept ofdiminishing sensitivity and compare the value function characterized above with a value function that covers diminishing sensitivity. (4 points)