JamierW2005
24.03.2020 •
Business
The railroad emits sparks from its engines which sometimes ignite fires on the farm. There is a 1/10 chance of a fire, and when a fire does occur $50,000 worth of crops are destroyed. It would cost the railroad $6,000 to install a spark arrestor that would prevent fires. The owner of the farm would be willing to pay the railroad no more than $ .
Solved
Show answers
More tips
- S Society and Politics Is It Fact or Fiction? Let s Talk About Anton Chekhov s Pseudonym...
- S Sport Playing Bowling: Rules and Advice for Novices...
- C Computers and Internet How to Properly Repartition a Hard Drive?...
- A Auto and Moto What Is the Cost of Customs Clearance for a Car in Russia?...
- L Leisure and Entertainment Should You Buy a Ceramic Knife?...
- C Computers and Internet How to easily and quickly disable Firebug in Gmail and Google Docs...
- G Goods and services How to sew a ribbon: Tips for beginners...
- F Food and Cooking How to Make Mayonnaise at Home? Secrets of Homemade Mayonnaise...
- C Computers and Internet Which Phone is Best for Internet Surfing?...
- F Food and Cooking Everything You Need to Know About Pasta...
Answers on questions: Business
- B Business Which platform is an employment website that job seekers to locate new job opportunities?...
- B Business Which social networking platform is specifically for career networking?...
- B Business Amanda wants to become an industrial designer. She wants to learn this specialized skill from expert in this industry by working for that expert as an intern. What term describes...
- H History Which statement about race relations in the north and south after reconstruction is true? a. the south became integrated; the north remained segregated. b. blacks mingled freely...
- C Chemistry Indicate if each bottle contains an element or a compound...
- M Mathematics 22.700 nearest hundredth/6413202/1c463fd9? utm_source=registration...
- H History In which dynasty did the reign of the pharaohs end? a. kingdom b. middle kingdom c. new kingdom d. old kingdom answer fast...
- H History How is this colonial law related to trade in georgia during the decades before the american revolution?...
- H History Prompt: do (a) private citizens or (b) the government have a duty to the poor? explain your answers using details that you have learned in this lesson. a hypothesis, or thesis...
- C Chemistry Entropy is a measure of what in a system...
Ответ:
$5,000
Explanation:
$50,000 *1/10 = $5,000 cost per chance of fire occurring
Ответ:
$5,000
Explanation:
The owner of the farm would want to minimize his loss in this situation. The chance of a fire occurring is 1/10 or 10%, and if it does occur, his crops worth $50,000 are damaged. Therefore,
Expected loss = 10% x $50,000 = $5,000
The owner of the farm would want to avoid this expected loss by having a spark arrestor installed to prevent the fire. The cost of a spark arrestor is $6,000.
However, the owner of the farm would only be willing to pay an amount for it which covers his expected loss i.e. $5,000. This is because his loss even in case of a fire does not exceed this amount. Hence, he would be willing to pay the railroad no more than $5,000.
Ответ: