The owner of a small deli is trying to decide whether to discontinue selling magazines. He...

The owner of a small deli is trying to decide whether to discontinue selling magazines. He suspects that only 10% of his customers buy a magazine and he thinks that he might be able to use the display space to sell something more profitable. Before making a final decision, he decides that for one day he will keep track of the number of customers that buy a magazine.

(a) Explain why this is a binomial experiment.

(b) Assuming his suspicion that 10% of his customers buy a magazine is correct, what is the probability that exactly 6 out of the first 10 customers buy a magazine? Give your answer as a decimal number rounded to two digits.

(c) What is the expected number of customers from this sample that will buy a magazine?

Solutions

Expert Solution

orchestra answered 1 year ago

Next > < Previous

Related Solutions

Booked Solid, a small independent bookstore in Bradford is trying to decide whether to discontinue selling...

Booked Solid, a small independent bookstore in Bradford is trying to decide whether to discontinue selling magazines. The owner suspects that only 7% of the customers buy a magazine and thinks that she might be able to use the display space to sell something more profitable. Before making a final decision, she decides that for one day he'll keep track of the number of customers and whether or not they buy a magazine. What is the probability that exactly 5...

The owner of WebCity is trying to decide whether to remain a proprietorship or to incorporate....

The owner of WebCity is trying to decide whether to remain a proprietorship or to incorporate. Suppose that the corporate tax rate on profits is 40 percent and the personal income tax rate is 50 percent. For simplicity, assume that all corporate profits (after corporate taxes are paid) are distributed as dividends in the year they are earned and that such dividends are subject to tax at the personal income tax rate. If the owner of WebCity expects to earn...

Bart Simpson is trying to decide whether or not he should lease or buy a new...

Bart Simpson is trying to decide whether or not he should lease or buy a new viper. The viper can be leased for $10,000 per year (first payment made right now) for 10 years or he can buy the car outright for a cost of $65,000. Bart has located a bank that will lend him the $65000 at a cost of 15.75%. Bart will drive the car for 10 years and will abuse viper to the point that it will...

Tom is trying to decide whether or not to join the discount grocery store. He consumes...

Tom is trying to decide whether or not to join the discount grocery store. He consumes food (good x) and a composite good (good y with py = 1). He currently has an income of I = 60 and faces a price of px = 4 if he doesn’t join the discount grocery store. If he pays the fee F = 24 and joins the discount grocery store, then he will only have to pay px = 2 for food....

1. Walter has reached a crossroads in his life. He is trying to decide whether to...

1. Walter has reached a crossroads in his life. He is trying to decide whether to change careers. Currently, Walter teaches chemistry but is considering entering a more lucrative line of work selling homemade pharmaceuticals. Walter can either teach 4 classes very well or produce 12 grams of his new drugs in a day. Interestingly, Walter’s friend Jesse is in a similar predicament. Jesse can teach 3 classes very well or produce 2 grams of drugs during a day. Walter’s...

1. Walter has reached a crossroads in his life. He is trying to decide whether to...

1. Walter has reached a crossroads in his life. He is trying to decide whether to change careers. Currently Walter teaches chemistry but is considering entering a more lucrative line of work selling homemade pharmaceuticals. Walter can either teach six classes very well or produce 12 grams of his new drugs in a day. Interestingly Walter’s friend Jesse is in a similar predicament. Jesse can teach 3 classes very well or produce 2 grams of drugs during a day. Walter’s...

(1)A local entertainment establishment, in a small town, is trying to decide whether it should increase...

(1)A local entertainment establishment, in a small town, is trying to decide whether it should increase its weekly advertising expenditure on a campus radio station. The last six weeks of data on monthly revenue and radio advertising expenditure are shown in the table below: Week 1 2 3 4 5 6 Revenue ($000) 3.0 4.0 2.0 4.0 7.0 3.0 Advertising Expenditure ($00) 2.0 3.0 0.0 6.0 8.0 4.0 (a)Write a regression model that relates both variables in the “general” and...

Your friend Harold is trying to decide whether to buy or lease his next vehicle. He...

Your friend Harold is trying to decide whether to buy or lease his next vehicle. He has gathered information about each option but is not sure how to compare the alternatives. Purchasing a new vehicle will cost $34,500, and Harold expects to spend about $1,300 per year in maintenance costs. He would keep the vehicle for five years and estimates that the salvage value will be $13,700. Alternatively, Harold could lease the same vehicle for five years at a cost...

A recent college grad is trying to decide whether he should keep his presently owned car...

A recent college grad is trying to decide whether he should keep his presently owned car or purchase a new one. A new car will cost $26,000 and have annual operation and maintenance costs of $1200 per year with an $8000 salvage value in 5 years, which is its economic service life. The presently owned car has a resale value now of $5000; 1 year from now it will be $3000, 2 years from now $2500, and 3 years from...

A company is trying to decide whether to bid for a certain contract or not. They...

A company is trying to decide whether to bid for a certain contract or not. They estimate that merely preparing the bid will cost $10000.If their company bids, then they estimate that there is a 50% chance that their bid will be put on the “short-list;” otherwise their bid will be rejected. Once “short-listed” the company will have to supply further detailed information (entailing costs estimated at $5000). After this stage their bid will either be accepted or rejected. The...

Subjects