DSE 2021 Question 20: Choice under uncertainty

An economy has two agents ($R$ and $P$) and two states (pandemic and normal). If pandemic, $R$ earns 10 and $P$ earns 5; in normal state $R$ earns 20 and $P$ earns 10. The probability of pandemic is $q$, $0 < q < 1$. Both are risk averse with utility $u(x)$ over net earnings. An insurance company sells an actuarially fair 'pandemic insurance' giving the consumer the same income in both states (insurer is risk neutral, zero profit). Consider two schemes to protect $P$: Scheme A - the government buys pandemic insurance for $P$, with the premium collected from $R$ as a tax; Scheme B - if pandemic, $R$ pays 5 to $P$ through a charity, otherwise no transfer. Which scheme will $R$ prefer? ($R$ is not eligible to buy the pandemic insurance.)