Question

solve for the level of u in the population density-the size of living quarters in terms of b, is there a higher u or lower u as b increases? explain the economic intuition

Answer 1

d and E are rightly done by you.

d) expected number of people arrive in 5 hour =5*12 =60=

therefore P(X<=70) = =0.9098

e)

expected number of people arrive in 3 hour =3*12 =36=

hence probability of more than 5 shoppers =P(X>5 )=1-P(X<=5) =1-=1-(~ 0.0000) =1

e)

here A is the event that 12 soppers arrive in 1 Hour ; and B|A event is that all 12 will make purchase given 12 arrive in 1 hour

P(A) =e^-12*12¹²/12! =0.1144

and P(B|A) =(0.45)¹² =6.895*10^-5

therefore required probability =P(A)*P(B|A) =0.1144*6.895*10^-5 =0.0000079