If patient insurance inquiries arrive at Blue Choice insurance with a mean rate of 3.6 calls per minute, the exponential probability of waiting more than 0.5 minutes to get the next inquiry call is _____. Question 6Select one: a. 0.2407 b. 0.1222 c. 0.5000 d. 0.1653

If patient insurance inquiries arrive at Blue Choice insurance with a mean rate of 3.6 calls per minute, the exponential probability of waiting more than 0.5 minutes to get the next inquiry call is _____. Question 6Select one: a. 0.2407 b. 0.1222 c. 0.5000 d. 0.1653

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are selling, but buyers do not. Buyers know that there is a 30% chance of getting a "lemon", a low quality used car. A high quality used car is worth $30,000, and a low quality used car is worth $15.000. Based on this probability, the most that a buyer would be willing to pay for a used car is S. (Enter your response rounded to the nearest dollar.)
QUESTION 17 ID probabilistic model and safety stock In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. What is the standard deviation of demand during lead time? Ⓒ15 100 154 13,125
7. Consider an individual whose utility function over money is u(w) = 1+2w. (a) Is the individual risk-averse, risk-neutral, or risk-loving? Does it depend on w? (b) Suppose the individual has initial wealth ¥W and faces the possible loss of Y. The probability that the loss will occur is . Suppose insurance is available at price p, where p is not necessarily the fair price. Find the optimal amount of insurance the individual should buy. You may assume that the solution is interior. (c) Is there a price at which the individual will not want to buy any insurance? If so, find it. If no, explain.
If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 50,000 bushels. The cost of pesticides is $30,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $9.00 with probability of 0.50 or it will be $11.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $10.00. If the farmer decides to sell the crop at harvest, then: a. He should not use pesticides because not using pesticides ensures greater expected profit. b. He should not use pesticides because not using pesticides ensures lower expected profit. c. He should use pesticides because using pesticides ensures greater expected profit. d. He should use pesticides because using pesticides ensures lower expected profit.
In a large casino, the house wins on its blackjack tables with a probability of 50.9%. All bets at blackjack are 1 to 1, which means that if you win, you gain the amount you bet, and if you lose, you lose the amount you bet. a. If you bet $1 on each hand, what is the expected value to you of a single game? What is the house edge? b. If you played 150 games of blackjack in an evening, betting $1 on each hand, how much should you expect to win or lose? c. If you played 150 games of blackjack in an evening, betting $3 on each hand, how much should you expect to win or lose? d. If patrons bet $7,000,000 on blackjack in one evening, how much should the casino expect to earn? a. The expected value to you of a single game is $ (Type an integer or a decimal.)
In this figure, what is the expected utility given a 0.25 chance of being sick? UH) U () E[UM)0.25 E[UM)o.75 B Figure 7.2. Expected utility from income for different probabilities of sickness. Is E[Io.75 E[M0.25 the corresponding U-value (utility) of point A, which is E[U(I)]o.25 the corresponding U-value (utility) of point B, which is E[U(I)]o.75 the corresponding I-value (income) of point A, which is E[I]o.25 the corresponding I-value (income) of point B, which is E[I]o.75
If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 55,000 bushels. The cost of pesticides is $20,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $10.00 with probability of 0.50 or it will be $12.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $11.00. If the farmer does not use pesticides and decides to sell the crop at harvest, what is his expected revenue? a. $550,000.00 b. $660,000.00 c. $600,000.00 d. $605,000.00
Assume that adults have IQ scores that are normally distributed with a mean of μ = 105 and a standard deviation o=15. Find the probability that a randomly selected adult has an IQ less than 123. Click to view page 1 of the table. Click to view page 2 of the table. The probability that a randomly selected adult has an IQ less than 123 is (Type an integer or decimal rounded to four decimal places as needed.) C
Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are selling, but buyers do not. Buyers know that there is a 30% chance of getting a "lemon", a low quality used car. A high quality used car is worth $30,000, and a low quality used car is worth $15,000. Based on this probability, the most that a buyer would be willing to pay for a used car is $ 25500. (Enter your response rounded to the nearest dollar.) Which of the following would best "solve" the asymmetric information problem in this market? O A. Prohibiting the sale of low-quality cars. O B. High-quality sellers could offer warranties or product guarantees. OC. Low-quality sellers could establish industry standards. O D. It is not possible to solve the asymmetric information problem in this market.
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a. Consider the Oakdale Furniture Company described in the given problem. Under what circumstances might the major portion of the usage of the glue be predictable?b. If the demand were predictable, would you want to use a probability law todescribe it? Under what circumstances might the use of a probability model of demand be justified even if the demand could be predicted exactly?