Clancy has difficulty finding parking in his neighborhood and, thus, is considering the gamble of illegally parking onthe sidewalk because of the opportunity cost of the time he spends searching for parking. On any given day, Clancyknows he may or may not get a ticket, but he also expects that if he were to do it every day, the average amount hewould pay for parking tickets should converge to the expected value. If the expected value is positive, then in the longrun, it will be optimal for him to park on the sidewalk and occasionally pay the tickets in exchange for the benefits ofnot searching for parking.Suppose that Clancy knows that the fine for parking this way is $100, and his opportunity cost (OC) of searching forparking 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

The mean or the initial moment are other names for the EV. A random variable's EV serves as a gauge…

Clancy 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, Clancy 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 un, it will be optimal for him to park on the sidewalk and occasionally pay the tickets in exchange for the benefits of hot searching for parking. Suppose that Clancy 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; f he does get a ticket, he ends up with a payoff of

Clancy 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, Clancy 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 un, it will be optimal for him to park on the sidewalk and occasionally pay the tickets in exchange for the benefits of hot searching for parking. Suppose that Clancy 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; f he does get a ticket, he ends up with a payoff of

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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