A consumer is trying to decide between two long-distancecalling plans. The first one charges a flat rate of10 per minute, whereas the second charges a flat rate of99 for calls up to 20 minutes in duration and then 10for each additional minute exceeding 20 (assume thatcalls lasting a noninteger number of minutes are chargedproportionately to a whole-minutes charge). Suppose theconsumers distribution of call duration is exponentialwith parameter l.a. Explain intuitively how the choice of calling planshould depend on what the expected call duration is.b. Which plan is better if expected call duration is10minutes? 15 minutes? [Hint: Let h1(x) denote thecost for the first plan when call duration is x minutesand let h2(x) be the cost function for the second plan.Give expressions for these two cost functions, and thendetermine the expected cost for each plan.]

Thursday, January 5 th Kim Gilbert Kimgilb@uga.edu TA Office Hours, Boyd Room 204 • Monday 11:15 am – 5:30 pm • Friday 11:15 am – 3:30 pm Case Study: Helper vs. Hinderer • If infants have no preference, then the outcome...