28. Insure (S). You own a $9000 car and a $850 mountain bike. The probability th

Apr 21st, 2015
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28. Insure (S). You own a $9000 car and a $850 mountain bike. The probability that your car will be stolen next year is 0.02, but the probability that your bike will be snatched is 0.1. An insurance company offers you theft insurance for your car for $200 and insurance for your bike for $75. What is the expected value of the car insurance? What is the expected value of the bike insurance? 

29. You search for a job. Three companies are interested in you, and you will receive at most one offer. The first company has a job open with a salary of $21,000, and the probability of getting an offer is 0.5. The second company has a job open paying $32,000, and the probability of getting an offer is 0.3. The last company has a job paying $45,000, and the probability of getting an offer is 0.1. There is a 0.1 probability of not landing any job. What is the expected income you will make next year?

Please write up p. 659 3,4,5,6,9,11. Make sure to make the writeup self contained by explaining all the steps needed to get to an answer in a manner that someone who did not attend class could follow. IMG_1972.JPG  IMG_1973.JPG  IMG_1974.JPG  IMG_1975.JPG 

3. Suppose a disease is expected to infect 2% of those living in the United States. If the population is 280,000,000, how many people could we expect to become infected with this disease?

4. Suppose a new vaccine that prevents the SARS virus is discovered. Each injection costs $10 and is expected to save 1 in 15,000,000 lives. What is the total cost per life saved for this vaccine? Would you support a government-sponsored program to vaccinate each citizen? Would your response change if a huge epidemic of SARS broke out and the injections would save 1 in 1000 lives? Explain why.

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