Question 2 A person has a wealth of $20,000 but faces an accident that results in a loss of S12,000 with probability, p. Suppose that Bermoulli utility is given by u(x) = -1/x. 1. Determine the...

Extracted text: Question 2 A person has a wealth of $20,000 but faces an accident that results in a loss of S12,000 with probability, p. Suppose that Bermoulli utility is given by u(x) = -1/x. 1. Determine the maximum amount of money the person is willing to pay for complete coverage (as a function of p). 2. Now suppose that an insurance company offers an insurance contract with a deductible of $2,000. Again, determine the maximum amount of money a person is willing to pay for this insurance contract.