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Unformatted text preview: Econ 319, Fall 2008 TA: Simon Kwok Handout 8 1. An ice-cream vendor is interested in the time T at which a customer comes and buys a cup of ice-cream on a day. Figure 1 shows the pdf f ( t ) of T . It is known that the probability of a customer buying a cup of ice-cream from the vendor before 3:00pm is 0.4. 12:00noon t 3:00pm 7:00pm 11:00pm 9:00am f ( t ) Figure 1 (a) The period from 12:00pm to 7:00pm each day is called the &happy hours. Find the probability that a customer comes and buys a cup of ice-cream in the happy hours. (b) The vendor can earn $5 for each cup of ice-cream sold in the morning and $8 for each one sold in the afternoon. Suppose that there are 10 customers today and each of the customers arrive at the vendor independently according to the distribution depicted in Figure 1 . 1. What is the probability that less than 4 come and buy ice-cream in the morning today? 2. What is the expected amount the vendor earns today?...
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