3. Further questions Aa Aa Now, imagine that the city of San Francisco decides t

Question

3. Further questions Aa Aa Now, imagine that the city of San Francisco decides to crack down on motorists who park on sidewalks by increasing the number of officers issuing parking tickets (thus, raising the probability of a ticket). If the cost of a ticket is $100 and the opportunity cost for the average driver of searching for parking is $12, which of the following probabilities would make the average person stop parking illegally? Assume that people will not park illegally if the expected value of doing so is negative. Check all that apply. 2196 1796 13% 1090 Alternatively, the city could hold the number of officers constant and discourage parking violations by raising the fine for illegal parking. Suppose the average probability of getting caught for parking illegally is currently 10% citywide and the average opportunity cost of parking is, again, $12. The fine that would make the average person indifferent between searching for parking and parking illegally is expected value of doing so is negative. , assuming that people will not park illegally if the

Explanation / Answer

21,17,13 apply because the expected value of 21,17,13 is greater than 12

Is 120 because 10% of 120 is equal to 12.so cost and benefit of parking will be 12 and person will be indifferent

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