Mr. Rubin has determined that his utility function for a change in fortune on the interval is (a) He is offered a choice between $100 and the chance to participate in a gamble wherein he wins $0...

Mr. Rubin has determined that his utility function for a change in fortune on the interval

is

(a) He is offered a choice between $100 and the chance to participate in a gamble wherein he wins $0 with probability

and $500 with probability

Which should he choose?

(b) Suppose he is offered instead a chance to pay $100 to participate in the gamble. Should he do it?