For the administration the waist controlling is costly. They can change the frequency/probability of control p. What is the minimum level of frequency of control p for which typical person will sort the wastes. Assume M0 = 100*N =…………, η = 0.3, F1 = 100, F2 = 200, SC = 50.

[ Hint: present the U(L2) as a function of p. When U(L1) = U(L2) typical person will be indifferent between sorting and non-sorting. Enter given parameters and solve the equation for p. Modify the Maxima codes.]

kill(all);

load(draw);

M0: 1000;

M11: M0 -200; /* possible outcomes of the lottery */

M21: M0 -300;

M22: M0 - 50;

a: 0.5;

U(a,M):= log(a*M); /* enter the function */

EU1: U(a,M11) ;

EU2: p*U(a,M21) + (1-p)*U(a,M22);

eq1: ''EU1 = ''EU2;

float(solve(eq1, p ));

How the solution is sensitive to: i) M0 ( people are reach or poor) ii) the fee for non-sorting wastes F2 iii) subjective cost of waste segregation SC. What can you suggest the administration?