Refer to the Data Provided in Table 17 -Refer to Table 17

Multiple Choice

Refer to the data provided in Table 17.4 below to answer the following question(s) . The table shows the relationship between income and utility for Celeste.
Table 17.4
$$\begin{array} { | c | c | } \hline { \text { Income } } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 40,000 & 50 \\\hline \$ 80,000 & 90 \\\hline \$ 120,000 & 120 \\\hline \$ 160,000 & 140 \\\hline\end{array}$$
-Refer to Table 17.4. Suppose Celeste has a 1/3 chance of becoming disabled in any given year. If she does become disabled, she will earn $0. If Celeste does not become disabled, she will earn her usual salary of $120,000. Celeste has the opportunity to purchase disability insurance for $40,000 which will pay her her full salary in the event she becomes disabled. Celeste's utility with the policy is

A) 90 and her expected utility without the policy is 80.
B) 90 and her expected utility without the policy is 90.
C) 120 and her expected utility without the policy is 80.
D) 40 and her expected utility without the policy is 90.