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

Multiple Choice

-Van, whose utility of wealth curve is shown in the above figure, owns a home that is valued at $100,000. Initially there is a 10 percent chance that the house will be destroyed by hurricane. As the risk of destruction due to hurricane rises from 10 percent to 20 percent, the minimum cost of insurance

A) stays the same.
B) increases by $10,000.
C) increases by $20,000.
D) increases by $30,000.