News Andrysis: cptimal Decision Making A Parking Dilemma Back to Assignment Attempts O Keep the Highest 0/5 2. The expected value of illegal parking Kate has difficulty finding parking in her neighborhood and, thus, is considering the gamble of illegally parking on the sidewalk because of the opportunity cost of the time she spends searching for parking. On any given day, Kate knows she may or may not get a ticket, but she also expects that if she were to do it every day, the average amount she would pay for parking tickets should converge to the expected value. If the expected value is positive, then in the long run, it will be optimal for her to park on the sidewalk and occasionally pay the tickets in exchange for the benefits of not searching for parking. Suppose that Kate knows that the fine for parking this way is $100, and her opportunity cost (OC) of searching for parking is $35 per day. That is, if she parks on the sidewalk and does not get a ticket, she gets a positive payoff worth $35; if she does get a ticket, she ends up with a payoff of Given that Kate does not know the probability of getting caught, compute her expected payoff from parking on the sidewalk when the probability of getting a ticket is 30% and then when the probability is 50% Probability of Ticket 10% 50% ORDER OFTALAH have shoped the ami bes bios Google AES Shipping Tax Total 1 Ne CENGAGE MINDTAP News Analysis: Optimal Decision Making: A Parking Dilemma C Given that Kate does not know the probability of getting caught, compute her expected payoff from parking on the sidewalk when the probability of getting a ticket is 10% and then when the probability is 50% Ren Probability of Ticket 10% 50% EV of Sidewalk Parking (OC - $35) B Now, suppose Kate gets a new job that requires her to work fewer hours. As a result, the opportunity cost of her time falls, and she now values the time saved from not having to look for parking at only $15 per day. Again, compute the expected value of the payoff from parking on the sidewalk given the two different probabilities of getting a ticket. Probability of Ticket 10% 50% EV of Sidewalle Parking (OC-$15) Based on the values you found in the first table, use the blue line (circle symbol) to plot the expected value of sidewalk parking on the following graph of time is $35 Rasad on the found in the shipping Q Search thi News Analysis: Optimal Decision Making: A Parking Dilemma Based on the values you found in the first table, use the blue line (circle symbol) to plot the expected value of sidewalk parking on the following graph when the opportunity cost of time is $35. Based on the values you found in the second table, use the orange line (square symbol) to plot the expected value of sidewalk parking when the opportunity cost of time is $15. EXPECTED VALUE OF ILLEGAL PARKING 30 22228898 40. 60 PROBABILITY OF TICKET 100 EV when OC is $35 -- EV when OC is $15 Search this course x $5.00 EXPECTED VALUE OF ILLEGAL PAR 10 20 db 4 50 20 60 PROBABILITY OF TICKET 80 100 EV when OC is $15 Despite Kate's uncertainty regarding the exact probability of being ticketed, suppose she decides to go ahead and park illegally every business day for two months (a total of 40 times). During the two months, she receives tickets on 10 days. If this is an accurate reflection of the overall probability of have parked receiving a ticket, then there is a chance of receiving a ticket. Given this chance of getting ticketed, she illegally when the opportunity cost of searching was $35. Now that the opportunity cost of searching is $15, at the same chance of getting a ticket, she park illegally. Grade It Now Save & Continue Continue without saving ORDER DETAKEH, We have shipped the hem bele Shipping Tax ECON251 Prin of Macroeconomics CENGAGE MINDTAP Chapter 9: Sample test EC ws Analysis: Optimal Decision Making: A Parking Dilemma EXPECTED VALUE OF ILLEGAL PAR 20 10 8 8 -10 40 -50 0 20 40 80 100 PROBABI 29.0% CKET 24.0% 28.0% Despite Kate's uncertainty regard act probability of being tick 25.0% two months (a total of 40 times). Je two months, she receive- receiving a ticket, then there is a illegally when the opportunity cost of searching was $35. Now that the she park illegally. chance of receiving a ti should go ahead and par an accurate refled ry business day for should not erall probability of ting ticketed, she have parked is $15, at the same chance of getting a ticket, Grade It Now Save & Continue Continue without saving Shipp S Hi Luke, We have shipped the item(s) below. Y..... Tax Inbox- Google 4/2/23 To kel Your Order is Being Processed! C