function u (c, m) = c + m + µ (c − rc) + µ (m − rm) where rc is his cake reference point, rm is his money reference point, and the function µ (·) is defined as µ (z) = z , z ≥ 0 and λz, z < 0 where λ > 0. 1. If his reference point is the status quo (that is, his initial endowment

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Q: utility function:

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