Answered: Late arrivals to classes cause loss at…

Late arrivals to classes cause loss at a rate of 100 taka /min. A student's late arrival (min) probability follows the table below. Probability Delay (min) 0.4 0.2 0.1 0.02 0.01 0.005 2 5 10 20 40 90

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A new company is offering its shares for sale in an initial public offering (IPO) through an…

Q: A riskeutral plaintiff in a lawsuit must decide whether to settle a claim or go to trial. The…

A: When deciding on uncertain incomes from payoff strategies, consumers look at the concerned risks.…

Q: Consider two local banks. Bank A has 100 loans outstanding, each for $0.9 million, that it expects…

A: Let's start by calculating the expected overall payoff and the standard deviation for each bank. For…

Q: Jakob is offered the choice between $100 or gamble rolling a single die. The gamble is this: if the…

A: Probability of coming up 6 on a single die is 1/6 Probability of coming up 5 :- 1/6 Probability of…

Q: What is the risk premium(s)?

A: Market Risk Premium: The amount that remains after deducting the risk-free rate of return from the…

Q: Economics Shawn's consumption is subject to risk. With probability 0.75 he will enjoy 10000 in…

A: Utility function = C1/2

Q: Catalina just inherited a vineyard from a distant relative. In good years (when there is no rain or…

A: To calculate the expected value of Catalina's income from the vineyard,we can use the following…

Q: snip

A: Larger sample sizes decreases the risk of the consumer.

Q: Probability is the likelihood or chance of an event occurring. Discuss its significance in real…

A: Probability is the chance of an event to occur. Probability are used in real life to predict the…

Q: Diego's current wealth is $800, but there is a 0.2 probability that he will lose $100. Diego is risk…

A: Given; Current wealth= $800 Probability of losing $100= 0.2 Diego is a risk neutral person.

Q: When you send out a resume, the probability of being called for an interview is 0.20. What is the…

A: You want to find the expected number of resumes you need to send out until you get the first…

Q: A principal is considering hiring a lawyer to represent him or her in a lawsuit. The principal gets…

A: In this question we have to solution or find out the entensive form of game with the help of above…

Q: You ask someone about their preferences over the following pairs of lotteries: Lottery A Lottery B…

A: Expected utility theory is the sum of the utilities weighted y the probability of happening. The…

Q: online school. Her utility function is based on the income she earns, and is defined b J(1) = 10.8.…

A: The utility function of consumer is differentiated to know if consumer is risk averse or risk lover.…

Q: 2. Alice maximizes expected utility with an index u(x) √x where x is the total annual income. Her…

A: In certainty equivalence the preference of the consumer is an assured amount rather a higher return…

Q: Many decision problems have the following simple structure. A decision maker has two possible…

A: In economics, risk refers to anticipated uncertainties associated with economic activities or…

Q: Decisions Involving Uncertainty - End of Chapter Problem You're a project manager overseeing five…

A: Probability of one team completing the project before time = 0.75 No of teams = 5 Probability of…

Q: Consider a lottery where one can either win $5,000 with a probability of 0.6 or lose $3,000 with a…

A: Risk premium refers to the amount an investor /individual is willing to pay in order to avoid the…

Q: Yuri owns just one ship, he calls it Previt. The ship is worth $25 million dollars. If the ship…

A: Insurance provides coverage over the risk. For claiming insurance people need to pay the premium and…

Q: True or False: You can protect against unsystematic risk. O True O False

A: Unsystematic risk is specific and unique to a firm or individual. This risk is diversifiable. In…

Q: The probability that a management trainee will remain with a company is 0-60. The probability that…

Q: Hello can any one help with this Economics question: A contractor spends Dollar 3,000 to prepare for…

Q: Consider an investment that pays off $700 or $1,600 per $1,000 invested with equal probability.…

A: The expected value of a statistical experiment is the result that will probably be attained after…

Q: A gym membership charges their current members a monthly fee on the 1" of the month. Monthly churn…

A: This problem requires the knowledge of the following topics: 1) Random Variables. 2) Expected Value…

Q: According to the text explain briefly how Risk Analysis helps the decision maker?

A: Introduction Decision-making analysis help to taking an optimal decision. Risk analysis can be…

Q: 12. Over the last decade, robotic-drone a research and development company has researched in new…

A: Given information $90M sales annually with 20% probability. $76M sales annually with 45%…

Q: A small bakery serves very popular fresh meat pies every day. The cost of making each pie is $2, and…

A: The breakeven point in business signifies a crucial equilibrium where the total revenue generated…

Q: If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he…

A: It is given that when a farmer uses the pesticides, he expects a crop of 60,000 bushels and when not…

Q: Suppose that every driver faces a 5% probability of an automobile accident every year. An accident…

A: Actuarially fair premium is a premium or price that is calculated based on the expected value of the…

Q: In a game, there are three values 1, 000, 2.500 and 5,000 and the cost of the game is 1, 500 . If…

A: Expected Value refers to the anticipated value for investment at some point in the future period. it…

Q: What is the expected value of this gambling game?

Q: You have determined that your risk tolerance is 160. Calculate your utility for the following…

A: Given risk tolerance = 160 Let say Y as payoff then the utility function = U(y) = 1 – e(-y/risk…

Q: If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he…

A: Without pesticides,profit Profit=total revenue-total cost Total revenue=50000*10=500000 Total…

Q: You are trying to decide between rescuing a puppy or an older dog. You decide to try to assign some…

A: Utility when the dog chews furniture = 0.1 Utility when dog goes on hike = 0.8 Expected Utility =…

Q: suppose you pay 25 dollars to enter into a raffle with a 400 dollar prize. if you have a 5% chance…

A: Expected Value = ∑payoff *probability here the winning is $400 with cost of $25. So our actual gain…

Q: You take a position with a large real estate development company as your first job after graduation.…

A: A posted price is the publicly displayed or advertised amount set by a seller for a product or…

Q: Economics A risk neutral worker has a reservation wage of 500 and a cost of high effort of 187.…

A: The reservation wage is $500. The cost of high effort is $187. The luck factors along with hard…

Question

How much is his risk on any random day due to late arrival?

Late arrivals to classes cause loss at a rate of 100 taka /min. A student's late arrival (min)
probability follows the table below.
Probability
Delay (min)
0.4
0.2
0.1
0.02
0.01
0.005
2
5
10
20
40
90

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Adam is considering what skills to study in online school. Her utility function is based on the income she earns, and is defined by U(I) = I0.8. If she learns the skill of SPSS, she will earn $145,000 per year with probability 1. If she learns the skill of Tableau, she will earn $300,000 per year with probability 0.6 (assuming that she gets the certificate) and $30,000 with probability 0.4 (if she learns without earning a certificate and she has to find a waiter job). a. Is she risk averse, risk neutral, or risk loving? Explain.b. Write out the equation for her expected utility for each skill. c.Which skill will she learn? Show your work. d.Suppose someone offers her insurance for the possibility that she does not get a Tableau certificate. This insurance will provide her an amount of income in addition to the waiter job wages that makes her indifferent between learning SPSS and Tableau. What is this amount, and what is the cost of the insurance? (note: many possible answers)
Why would people prefer to pay by credit card and pay 12% interest when they have a savings with a savings account with sufficient funds paying them only 3% This is for behavioral economics mock exam. Thanks
Paul hires Amy to manage his bakery shop. The following table gives the shop's profits (without subtracting payments to Amy) under 3 different levels of Amy's effort and two different states of the world (good and bad weather). There is an 80% probability that the weather would turn good. Bad weather (20%) Good weather (80%) Low Effort 200 400 Medium Effort 400 800 High Effort 800 1000 The cost of low effort is $10, medium effort $20 and high effort $40. Paul offers a fixed salary of $100 and bonus B if revenue is equal to or higher than $800 and nothing otherwise. What should be the minimum value of B so that Amy would put high effort?
A construction company needs to move lumber onto the roof of a building. If the lumber falls and hits someone it will cause $1,200,000 in damage. Assume that company must choose between the following levels of precaution: Spend $500 and the probability of an accident is .05 Spend $5,000 and the probability of an accident is .01 Spend $8,000 and the probability of an accident is .008 Spend $10,000 and the probability of an accident is .003 If the construction company is strictly liable for the costs of the accident, how much would they spend on precaution? A. $500 B. $5,000 C. $8,000 D. $10,000
What type of risk behavior does the person exhibit who is willing to bet $60 on a game where 20% of the time the bet returns $100, and 80% of the time returns $50? Is this a fair bet? Explain.
3
Utility Theory You live in an area that has a possibility of incurring a massive earthquake, so you are considering buyingearthquake insurance on your home at an annual cost of $180. The probability of an earthquake damagingyour home during one year is 0.001. If this happens, you estimate that the cost of the damage (fully coveredby earthquake insurance) will be $160,000. Your total assets (including your home) are worth $250,000. A. Apply Bayes’ decision rule to determine which alternative (take the insurance or not) maximizes yourexpected assets after one year.
Please Solve i give upvote
Define the term Aggregating Risk over time?
Jack and Diane work at a bakery. Jack can make either five batches of cookies or two cakes per hour, while Diane can make either four batches of cookies or three cakes per hour. At 9:00 a.m. they receive an order for 24 batches of cookies and nine cakes. What time is the soonest they can have the order ready?
Define risk-seeking.
In 150 words