Dane Has a Car Valued at $20,000 That Gives Him

Multiple Choice

Dane has a car valued at $20,000 that gives him a utility of 80. There is a 5 percent chance that he will have an accident that will make his car worthless, in which case his utility will be zero. His utility from a wealth of $15,000 is 76. The maximum amount Dane will be willing to pay for insurance is

A) $1,000.
B) $3,000.
C) $5,000.
D) $15,000.