"We chose this plan because it would benefit the majority of you, and harm the fewest" would be an example of using this perspec
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Answer:
If Victoria purchases insurance, she will have (4000-1200) = $2800 for consumption. Now even if she has an accident, she will not have to incur any medical costs.
So the expected value of Victoria’s consumption should she purchase the insurance cover is $2800.
Expected utility should Victoria purchase insurance will be equal to the total utility as Victoria will surely have 3100 for consumption.
E(U )=
E(U) = 621 (rounded off to nearest integer)