Question: Oscar's utility function is _ J3? ifs: 20, (33) _ { '/x ifm g 0. Note that a: is allowed to take on negative values.

Oscar's utility function is _ J3? ifs: 20, \"(33) _ { '/x ifm g 0. Note that a: is allowed to take on negative values. A positive value is a monetary gain, a negative value is a loss. (a) Is Oscar risk-averse? Explain your answer. Hint: sketch the graph of the function u. (b) Consider the lottery L = (0,10; 1/2,1/2), which yields $0 with probability 1/2 and $ 10 with probability 1/2. What is the risk premium that Oscar associates with this lottery? How much is he willing to pay for this lottery

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