Unformatted text preview: 2. Two ice-cream stands are deciding where to locate along a 1-mile beach. Each person sitting on the beach buys exactly 1 ice-cream cone per day from the nearest stand. Each ice-cream seller wants the maximum number of customers. Where along the beach will the two stands locate? The first ice-cream stand should be at the .5 mile marker and the second stand should be at the 1 miles marker. This helps maximize their potential for customers because they are evenly apart. 3. After a widely reported earthquake in California, many people call their insurance company to apply for earthquake insurance. Might this reaction reflect some deviation from rationality? Discuss. Yes, this does deviate from reality. If the home applied for earthquake insurance prior to the earthquake they would have planned in advance for such an event. A lot of home owners do not get earthquake insurance with when first offered because they believe that they will never affected by such a event....
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This note was uploaded on 02/22/2011 for the course ECON BA 372 taught by Professor Dickliter during the Summer '10 term at Andrew Jackson.
- Summer '10