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# A consumer who has \$1000 is represented by the expected utility function u(x) = √x. A...

A consumer who has \$1000 is represented by the expected utility
function u(x) = √x. A lottery ticket is sold at \$80 whose prize is \$10000
with probability 1/10 and zero with probability 9/10

Find the certainty equivalent of the lottery ticket. Find the risk premium of the lottery ticket. Should this consumer buy the ticket? Why?

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