Kevin has a utility function U=W^1/2, where W is his wealth in millions of dollars and U is the utility he obtains from that wealth. In the final stage of a game show, the host offers Kevin a choice between (A) $9 million for sure, or (B) a gamble that pays $1 million with probability 0.4 and $16 million with probability 0.6. Use the blue curve (circle points) to graph Kevin's utility function at wealth levels of $0, $1 million, $4 million, $9 million, and $16 million.

True or False: Kevin is risk averse.
-True
-False

Choice (A/B) offers Kevin a higher expected prize. (Hint: The expected value of a random variable is the weighted average of the possible outcomes, where the probabilities are the weights.)

Choice (A/B) offers Kevin a higher expected utility.

Kevin should pick choice (A/B) .

James jones is the owner of a small retail business operated as a sole proprietorship. during 2017, his business recorded the following items of income and expense: revenue from inventory sales $ 147,000 cost of goods sold 33,500 business license tax 2,400 rent on retail space 42,000 supplies 15,000 wages paid to employees 22,000 payroll taxes 1,700 utilities 3,600 compute taxable income attributable to the sole proprietorship by completing schedule c to be included in james’s 2017 form 1040. compute self-employment tax payable on the earnings of james’s sole proprietorship by completing a 2017 schedule se, form 1040. assume your answers to parts a and b are the same for 2018. further assume that james's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. calculate james's 2018 section 199a deduction.