In the past few years, the traffic problems in Lynn McKell's hometown have gotten worse. Now, Broad Stre is congested about half the time. The normal travel time to work for Lynn is only 15 minutes when Broad Street is used and there is no congestion. With congestion, however, it takes Lynn 40 minutes to get to work If Lynn decides to take the expressway, it will take 30 minutes, regardless of the traffic conditions. Lynn's utility for travel time is U(15 minutes)=0.9, U(30 minutes)=0.7, and U(40minutes)=0.2. Question 18 Which route will minimize Lynn's expected travel time?
In the past few years, the traffic problems in Lynn McKell's hometown have gotten worse. Now, Broad Stre is congested about half the time. The normal travel time to work for Lynn is only 15 minutes when Broad Street is used and there is no congestion. With congestion, however, it takes Lynn 40 minutes to get to work If Lynn decides to take the expressway, it will take 30 minutes, regardless of the traffic conditions. Lynn's utility for travel time is U(15 minutes)=0.9, U(30 minutes)=0.7, and U(40minutes)=0.2. Question 18 Which route will minimize Lynn's expected travel time?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
PLEASE PLEASE HELP ME THANKSS
Transcribed Image Text:In the past few years, the traffic problems in Lynn McKell's hometown have gotten worse. Now, Broad Stree
is congested about half the time. The normal travel time to work for Lynn is only 15 minutes when Broad
Street is used and there is no congestion. With congestion, however, it takes Lynn 40 minutes to get to work.
If Lynn decides to take the expressway, it will take 30 minutes, regardless of the traffic conditions. Lynn's
utility for travel time is U(15 minutes)=0.9, U(30 minutes)=0.7, and U(40minutes)=0.2.
Question 18
Which route will minimize Lynn's expected travel time?
Broad Street
Expressway
Question 19
Which route will maximize Lynn's utility?
Broad Street
Expressway
Question 20
When it comes to travel time, is Lynn a risk seeker or a risk avoider?
Risk seeker
Risk avoider
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 3 images
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education