The Baker Family Is Faced with Two Possible States

True/False

The Baker family is faced with two possible states.In state 1, they remain healthy and incur no medical expenses.In state 2, their medical expenses will be $8,000.There is a 30% chance that state 1 will occur and a 70% chance that state 2 will occur.An insurance company offers to pay all of their medical expenses for a premium of $6,000.From the Bakers' point of view, this is a fair insurance policy.True
Jill is a risk-averse expected-utility maximizer.Jack offers her the following bet: he will toss a coin and pay her $5 if it comes down heads, but if it comes down tails, Jill will have to pay him
$5.Even though heads and tails are equally likely, Jill will not take the bet.False