Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Just confused about these practice problems Multiple Choice. The nal questions are based on the following scenario. A railroad track runs alongside a farmer's eld,

Just confused about these practice problems

image text in transcribed
Multiple Choice. The nal questions are based on the following scenario. A railroad track runs alongside a farmer's eld, and passing trains sometimes emit sparks that cause res which damage the farmer's crops. Suppose that the railroad can take one of three actions: (1} no action; (2) install a spark arrester at a cost of $50; (3) stop running trains at a cost of $200. The lowing table shows the costs of these actions to the RR and the impacts that the}:r have on the probability ofa re. Theeost ofa re in all cases is $150. Action CosttoRR Probability of are Lossto farmer 'omare (1} Noaction $ 0 1 $150 (2} Installanarrester $ 50 .50 $150 (3} Stop running trains $200 0 $150 _ 22. The action that minimizes total expected accident costs is (a) No action. (b) Install an arrester. (c) Stop running trains. (d) Costs are equal under all three options. _ 23. The total cost resulting 'om this costminimizing action is (a) $125. (b) $150. ((3) $200. (d) $350. _ 24. Suppose the Hand test is used to compare \"Install an arrester" and \"No action." We compute B and PL in this case as follows: (a) B=$0 and PL=$150 (b) B=$0 and PL=$75 (c) B=$50 and PL=$ 150 (d) B=$50 andPL=$T5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sociology Of Economic Innovation

Authors: Francesco Ramella

1st Edition

1317621344, 9781317621348

More Books

Students also viewed these Economics questions

Question

What is a digital signature? What does it tell a user?

Answered: 1 week ago

Question

What is one of the skills required for independent learning?Explain

Answered: 1 week ago

Question

Do not come to the conclusion too quickly

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago