-Van, Whose Utility of Wealth Curve Is Shown in the Above

question 179

Multiple Choice

-Van, whose utility of wealth curve is shown in the above figure, owns a home that is valued at $100,000. There is a 10 percent chance that the house will be destroyed by hurricane. The minimum cost of insurance in this case is

• A) $10,000.
• B) $20,000.
• C) $30,000.
• D) $40,000.