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40 60 PROBABILITY OF TICKET 80 100 O EV when OC is $20 EV when OC is $30 + y regarding the exact probability of being ticketed, suppose he decides to go ahead and park illegally every business day for times). During the two months, he receives tickets on 10 days. If this is an accurate reflection of the overall probability of mere is a chance of receiving a ticket. Given this chance of getting ticketed, he have parked unity cost of searching was $20. Now that the opportunity cost of searching is $30, at the same chance of getting a ticket, he

40 60 PROBABILITY OF TICKET 80 100 O EV when OC is $20 EV when OC is $30 + y regarding the exact probability of being ticketed, suppose he decides to go ahead and park illegally every business day for times). During the two months, he receives tickets on 10 days. If this is an accurate reflection of the overall probability of mere is a chance of receiving a ticket. Given this chance of getting ticketed, he have parked unity cost of searching was $20. Now that the opportunity cost of searching is $30, at the same chance of getting a ticket, he

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Please answer everything in the pictures including the graph.
Based on the values you found in the first table, use the blue line (circle symbol) to plot the expected value of sidewalk parking on the following graph when the opportunity cost of time is $20. Based on the values you found in the second table, use the orange line (square symbol) to plot the expected value of sidewalk parking when the opportunity cost of time is $30. EXPECTED VALUE OF ILLEGAL PARKING 8 8 8 8 8 8 8 8 30 20 -10 -20 -30 -40 -50 0 20 40 60 PROBABILITY OF TICKET 80 100 *O**** EV when OC is $20 O EV when OC is $30 + Despite Kenji's uncertainty regarding the exact probability of being ticketed, suppose he decides to go ahead and park illegally every business day for two months (a total of 40 times). During the two months, he receives tickets on 10 days. If this is an accurate reflection of the overall probability of receiving a ticket, then there is a chance of receiving a ticket. Given this chance of getting ticketed, he have parked illegally when the opportunity cost of searching was $20. Now that the opportunity cost of searching is $30, at the same chance of getting a ticket, he park illegally.
Transcribed Image Text:Based on the values you found in the first table, use the blue line (circle symbol) to plot the expected value of sidewalk parking on the following graph when the opportunity cost of time is $20. Based on the values you found in the second table, use the orange line (square symbol) to plot the expected value of sidewalk parking when the opportunity cost of time is $30. EXPECTED VALUE OF ILLEGAL PARKING 8 8 8 8 8 8 8 8 30 20 -10 -20 -30 -40 -50 0 20 40 60 PROBABILITY OF TICKET 80 100 *O**** EV when OC is $20 O EV when OC is $30 + Despite Kenji's uncertainty regarding the exact probability of being ticketed, suppose he decides to go ahead and park illegally every business day for two months (a total of 40 times). During the two months, he receives tickets on 10 days. If this is an accurate reflection of the overall probability of receiving a ticket, then there is a chance of receiving a ticket. Given this chance of getting ticketed, he have parked illegally when the opportunity cost of searching was $20. Now that the opportunity cost of searching is $30, at the same chance of getting a ticket, he park illegally.
Kenji has difficulty finding parking in his neighborhood and, thus, is considering the gamble of illegally parking on the sidewalk because of the opportunity cost of the time he spends searching for parking. On any given day, Kenji knows he may or may not get a ticket, but he also expects that if he were to do it every day, the average amount he would pay for parking tickets should converge to the expected value. If the expected value is positive, then in the long run, it will be optimal for him to park on the sidewalk and occasionally pay the tickets in exchange for the benefits of not searching for parking. Suppose that Kenji knows that the fine for parking this way is $100, and his opportunity cost (OC) of searching for parking is $20 per day. That is, if he parks on the sidewalk and does not get a ticket, he gets a positive payoff worth $20; if he does get a ticket, he ends up with a payoff of $ Given that Kenji does not know the probability of getting caught, compute his expected payoff from parking on the sidewalk when the probability of getting a ticket is 10% and then when the probability is 50%. EV of Sidewalk Parking (OC= $20) $ EV of Sidewalk Parking (OC= $30) Probability of Ticket 50% 10% Now, suppose Kenji gets a new job that requires him to work longer hours. As a result, the opportunity cost of his time rises, and he now values the time saved from not having to look for parking at $30 per day. $ Again, compute the expected value of the payoff from parking on the sidewalk given the two different probabilities of getting a ticket. Probability of Ticket 50% $ 10%
Transcribed Image Text:Kenji has difficulty finding parking in his neighborhood and, thus, is considering the gamble of illegally parking on the sidewalk because of the opportunity cost of the time he spends searching for parking. On any given day, Kenji knows he may or may not get a ticket, but he also expects that if he were to do it every day, the average amount he would pay for parking tickets should converge to the expected value. If the expected value is positive, then in the long run, it will be optimal for him to park on the sidewalk and occasionally pay the tickets in exchange for the benefits of not searching for parking. Suppose that Kenji knows that the fine for parking this way is $100, and his opportunity cost (OC) of searching for parking is $20 per day. That is, if he parks on the sidewalk and does not get a ticket, he gets a positive payoff worth $20; if he does get a ticket, he ends up with a payoff of $ Given that Kenji does not know the probability of getting caught, compute his expected payoff from parking on the sidewalk when the probability of getting a ticket is 10% and then when the probability is 50%. EV of Sidewalk Parking (OC= $20) $ EV of Sidewalk Parking (OC= $30) Probability of Ticket 50% 10% Now, suppose Kenji gets a new job that requires him to work longer hours. As a result, the opportunity cost of his time rises, and he now values the time saved from not having to look for parking at $30 per day. $ Again, compute the expected value of the payoff from parking on the sidewalk given the two different probabilities of getting a ticket. Probability of Ticket 50% $ 10%
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