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Statistics and probability

Course: Statistics and probability > Unit 9

Lesson 8: More on expected value

Making decisions with expected values

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Mopedin’ Marvin is arguing with his mom about buying a

$ 150

light for his moped. His mom wants him to be safe, but Marvin thinks that lights are too expensive.

Based on traffic data, Marvin makes the table below which shows the time, probability, and cost of three different types of accidents if Marvin doesn’t have the light.

If Marvin purchases the light, it will not matter in the morning or at dusk, but it will prevent a night accident from occurring. Assume that Marvin can get in at most one accident and that Marvin's table is accurate.

What is the expected total cost of accidents and lights if Marvin buys the light? Round your answer to the nearest dollar. $$$ ‍
Your answer should be
an integer, like $6$ ‍
an exact decimal, like $0.75$ ‍
a simplified proper fraction, like $3 / 5$ ‍
a simplified improper fraction, like $7 / 4$ ‍
a mixed number, like $1 3 / 4$ ‍

What is the expected total cost of accidents and lights if Marvin does not buy the light? Round your answer to the nearest dollar. $$$ ‍
Your answer should be
an integer, like $6$ ‍
an exact decimal, like $0.75$ ‍
a simplified proper fraction, like $3 / 5$ ‍
a simplified improper fraction, like $7 / 4$ ‍
a mixed number, like $1 3 / 4$ ‍

If Marvin wants the best payoff in the long run, he should
.

Time of accident	Cost	Probability
Morning	$$ 2000$ ‍	$10 %$ ‍
Dusk	$$ 4000$ ‍	$15 %$ ‍
Night	$$ 2000$ ‍	$20 %$ ‍

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Statistics and probability

Course: Statistics and probability > Unit 9

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