Question: Mr. Smith's utility function for money is U(M) = (1-1/M) . He suffers from an injury on his job and is planning to sue. If

  1. Mr. Smith's utility function for money isU(M) = (1-1/M). He suffers from an injury on his job and is planning to sue. If he wins the case (with probability 0.6), he will get damages of 5, whereas if he loses, he will get no damages. His income is 5. Can a risk neutral lawyer with an opportunity cost of 2 offer a deal to Mr. Smith that will make him sue?

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