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

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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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