Suppose you were granted a "risky job" of the type studied in this chapter. The job pays $40,000 with probability 1/2, and $160,000 with probability 1/2. What is your certainty equivalent for this risky payoff? To answer this question, compare this risky job to a safe job paying $100,000 for sure. Then reduce the value of the safe job in $1,000 increments until you are indifferent between the safe job and the risky job. What is your certainty equivalent for a job paying $10,000 or $190,000, each with equal probability?