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Consider a driver who is considering whether to park illegally. By parking illegally, drivers save time and effort worth . But, by doing so, they
Consider a driver who is considering whether to park illegally. By parking illegally, drivers save time and effort worth . But, by doing so, they expose themselves to the possibility of receiving a parking ticket with a fine , such that >. The probability of being fined is . Assume the driver has exogenous wealth equal to .
a) What is the driver's expected utility associated with parking illegally?
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