Suppose that an individual is offered the fair gamble of receiving $1,000 on the flip of a coin showing heads and losing $1,000 on the flip of a fair coin showing tails. Suppose further that the individual’s utility of money function is

a. For positive money income, what is this individual’s attitude toward risk?

b. If the individual’s initial money income is $50,000, will he or she accept this bet? Explain.