Question: Marcus is an expected utility maximizer with the Bernoulli utility function u(w) = m He faces a gamble in his wealth. In a good state

Marcus is an expected utility maximizer with the Bernoulli utility function u(w) = m He faces a gamble in his wealth. In a good state he gets 81 and in a bad state he gets 9. He can take out an insurance plan which will leave him with a wealth of 49 in each state. (a) (1 point) Is Marcus risk averse? (b) (2 points) Will he purchase the insurance if the probability of the states is for each state? (c) (2 points) Let denote the probability of the good state. For what value(s) of will Markus be just indifferent between taking out the insurance and not taking it out? Show your working

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