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- A wheel of fortune in a gambling casino has 54 different slots in which the wheel pointer can stop. Four of the 54 slots contain the number 9. For a 1 dollar bet on hitting a 9, if he or she succeeds, the gambler wins 10 dollars plus the return of the 1 dollar bet. What is the expected value of this gambling game? What is the meaning of the expected value result?Hello can any one help with this Economics question: A contractor spends Dollar 3,000 to prepare for a bid on a construction project which, after deducting manufacturing expenses and the cost of bidding, will yield a profit of dollar 25,000 if the bid is won. If the chance of winning the bid is ten per cent, compute his expected profit and state the likely decision on whether to bid or not to bid?6. Jerry plans to buy a new Bluetooth headset. He knows that the same product is offered in different shops with prices of $44, $49, and $60, and with odds of one-third of finding each price. He just stopped at a shop and knows that their price is $49. If the search cost is $1 per additional search, what should Jerry do?
- QUESTION 28 A deck of 52 playing cards consists of 4 suites: clubs, spades, hearts, and diamonds. Each suite consists of 13 cards. Draw one from a deck of cards. Let A=a card "2" is drawn, B=a "diamond" card is drawn. What is the value of P(not B), i.e. P(the card drawn is not “diamond")? 1/52 13/52 4/52 51/52 39/52 48/52A lottery system has balls numbered 1 to 65 and randomly selects 6 of the lottery balls. There is only one prize of $ 10,000,000.00 which is awarded only it a lottery player selects the correct set of 6 lottery balls. a) If a lottery ticket costs $ 5.00, what is a lottery player's expected value? b) How much would the lottery prize have to be worth if it was to be a fair game? (Note: Include dollar signs in your answer)In a final round of a MegaMillion TV show, a contestant has won $1 millionand has a chance of doubling the reward. If he loses his winnings drop to$500,000. The contestant thinks his chances of winning are 50%. Should heplay? What is the lowest probability of a correct guess that will make his betprofitable? Show work
- 15. A city mayor decides to construct a new bridge over the major river in the town. The estimated life of such a structure will be 20 years. There is a 70% probability that the total initial costs (consulting fees and construction) will be $800,000 and a 30% probability that such costs would be $1 million. There is 100% probability that the maintenance costs would be $30,000 every 5 years. How much money should the city borrow now in order to carry out the entire project including maintenance? The interest rate is 5%.Online sale Suppose a student is considering selling their used smartphone online. They can sell it now for $p or wait and sell it next month for a different price. If they wait, they will receive a random offer with an equal probability of being either $300 or $100. The student can only receive one offer and cannot sell the phone after the second month. 1. Calculate the expected price in the next month. 2. Suppose that the current price p is equal to 200. (a) Give a reason why selling today could be a good idea. (b) Give a reason why selling next month could be a good idea.1: A risk-averse individual is offered a choice between a gamble that pays £2000 with a probability of 25% and £200 with a probability of 75%, or a payment of £650. Using a diagram explain which he would choose? What if the payment was £640?
- 4. You wish to hire Ricky to manage your Dallas operations. The profits from the operations depend partially on how hard Ricky works, as follows. Probabilities Profit $10,000 Profit= $50,000 Lazy worker 40% 60% 20% Hard worker 80% If Ricky is lazy, he will surf the Internet all day, and he views this as a zero cost opportunity. However, Ricky would view working hard as a "personal cost" valued at $1,000. What fixed percentage of the profits should you offer Ricky? Assume Ricky only cares about his expected payment less any "personal cost."6- Suppose Firm B is selling 1 -year insurance contracts for houses. Suppose Firm B's customers are divided into three categories with different probabilities of needing a payment. First category will ask for a payment of 500000 with probability 0.10, the second category will ask for a payment of 250000 with probability 0.15 and the third category will ask for a payment of 100000 with probability 0.2 a. Calculate Firm B's expected payment for the year. Suppose Firm B has 120 customers in the first category, 230 in the second category and 405 in the third category. b. Calculate individual premium if Firm B charges the same amount to all its customers. 1 c. Calculate individual premium if Firm B utilizes the risk groups and charges the same amount of premium within groups d. Which group/groups are more likely to buy the insurance with group pricing compared to the case with uniform pricing?Question 5 You negotiate with a retailer over a contract according to which the retailer would buy a large fraction of your current production for next year. The retailer is perfectly informed about consumer demand, but you do not know whether demand is high or low. You only know that the probability for high demand is 80%. If demand is high, the retailer's profit is £5 million minus what he pays to you according to your contract. If demand is low, the retailer's profit is £3 million minus what he pays to you. Your costs of producing the output specified in the contract are £1 million. You can make sequential offers for the retailer's total payment for you to deliver a fixed quantity of your production. As you know that your competitor is also seeking a similar contract with this retailer, and the retailer can only supply one firm due to limited shelf space, you know that you can only make at most two offers. If your first offer is rejected, the retailer will strike the deal with your…