A consumer is trying to decide between two long-distance calling plans. The first one charges a...

A consumer is trying to decide between two long-distance calling plans. The first one charges a flat rate of 10 cents per minute. The second charges a flat rate of 99 cents for calls up to 20 minutes in duration and then 10 cents for each additional minute exceeding 20. (Assume that calls lasting a non-integer number of minutes are charged proportionately to a whole-minutes charge). If the duration of a randomly selected call of this consumer is exponentially distributed and its expected value is 15 minutes, compute the expected value of the corresponding charge by each plan.

Hint: Denote by X the duration of a random call, by Y1 the charge of the first plan, and by Y2 the charge of the second plan. Then, express Y1 and Y2 as functions of X, i.e., Y1 = h1(X) and Y2 = h2(X)

Expert Solution

milcah answered 2 months ago

A consumer is trying to decide between 2 long-distance calling plans. The first one charges a...

A consumer is trying to decide between 2 long-distance calling plans. The first one charges a flat rate of 10 cents/min, while the second charges a flat rate of 99 cents for calls up to 20 minutes and then 10 cents for each additional minute exceeding 20 minutes (assume that calls lasting a noninteger number of minutes are charged proportionally, e.g. 6 seconds is 1/10 of a minute and so 6 seconds over 20 minutes would be charged 1 cent)....

A consumer with a weekly budget of $20 can choose between two international calling plans. The...

A consumer with a weekly budget of $20 can choose between two international calling plans. The first plan has no sign-up costs and charges 5c per minute of conversation, the second plan charges a flat weekly fee of $5 and zero cents per minute. Draw a diagram where you measure minutes of conversation along the horizontal axis and money for other items along the vertical axis and illustrate the consumer’s budget line under the first plan. Under the first plan...

You are trying to decide between two investments. The first investment has a 90% chance to...

You are trying to decide between two investments. The first investment has a 90% chance to make you $2,000, but the alternative is that you could be losing $5,000. The second investment has a 15% chance to make you $25,000, but the alternative is that you could be losing $5,000. Use expected value to help decide which investment is the mathematically smart choice. (Hint: make two separate expected values and compare).

A company is trying to decide between making or buying a component in one of their...

A company is trying to decide between making or buying a component in one of their products. The fixed and variable costs for both options are given below: Cost Make Option Buy Option Fixed Cost $25000 $3000 Variable Cost $8 $12 a. Find the break-even quantity and the total cost at the break-even point. b. If the requirement is 4,500 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings...

You are currently trying to decide between two cost structures for your business: one that has...

You are currently trying to decide between two cost structures for your business: one that has a greater proportion of short-term fixed costs and another that is more heavily weighted to variable costs. Estimated revenue and cost data for each alternative are as follows: Cost Structure Alternative #1 Alternative #2 Selling price per unit $ 50 $ 50 Variable cost per unit 20 15 Short-term fixed costs/year 85,000 90,000 Required: 1. What sales volume, in units, is needed for the...

this is in excel VB8 Program 3: Long-Distance Calls A long-distance provider charges the following rates...

this is in excel VB8 Program 3: Long-Distance Calls A long-distance provider charges the following rates for telephone calls: Rate Category Rate per Minute Daytime (6:00 A.M. through 5:59 P.M.) $0.07 Evening (6:00 P.M. through 11:59 P.M.) $0.12 Off-Peak (12:00 A.M. through 5:59 A.M.) $0.05 Create an application that allows the user to select a rate category and enter the number of minutes of the call, then displays the charges. Use the following test data to determine if the application...

1)What is the force between two equal charges (1 Coulomb) that are separated by a distance...

1)What is the force between two equal charges (1 Coulomb) that are separated by a distance of 1 km? 2)Suppose that the charge of one of the charges in problem #1 is reduced to half of its original value. How does the new force compare to the original force?

Long-Distance Calls A long-distance provider charges the following rates for telephone calls: Rate Category Daytime (6:00...

Long-Distance Calls A long-distance provider charges the following rates for telephone calls: Rate Category Daytime (6:00 A.M. through 5:59 P.M.) Evening (6:00 P.M. through 11:59 P.M.) Off-Peak (12:00 A.M. through 5:59 A.M.) Rate per Minute $0.07 $0.12 $0.05 Create a C++ program that allows the user to select a rate category and enter the number of minutes of the call, then displays the charges. Use the following test data to determine if the application is calculating properly: Rate Category and...

Two charges each +q are initially separated by a distance d. If you triple the distance,...

Two charges each +q are initially separated by a distance d. If you triple the distance, the magnitude of the force does what?

The manager in a canned food processing plant is trying to decide between two labeling machines....

The manager in a canned food processing plant is trying to decide between two labeling machines. Machine A Machine B First Cost $15,000 $25,000 Maintenance and operating costs 1,600 400 Annual benefit 8,000 13,000 Salvage value 3,000 6,000 Useful life, in years 6 10 a) Assume an interest rate of 6%. slove using annual worth to determine which machine should be chosen. b) Solve using Internal Rate of Return

Question