Problem
Suppose that Maria seeks to maximize the expected value of the benefit function W(F) = 1,000F - F2 (for values of F below 100). Maria consumes 50 kg of food when it's sunny and 30 kg when there's a hurricane. There's a 25 percent chance of a hurricane. Compute her expected payoff, her expected utility, the certainty equivalent of her risky consumption bundle, and the risk premium.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.