The Probability That a Car Will Have a Flat Tire

question 6

Multiple Choice

The probability that a car will have a flat tire while driving through a certain tunnel is 0.00005. Use the Poisson distribution to approximate the probability that among 14,000 cars passing through this tunnel, exactly two will have a flat tire. Round your answer to four decimal
Places.

• A) 0.1460
• B) 0.8783
• C) 0.1217
• D) 0.1947
• E) 0.1703

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Definitions:

External Cost

Costs of a transaction that affect people other than the buyer or seller, often not included in the price of goods or services.

Efficient Amount

The level of production or quantity of a good that optimizes the use of resources to achieve the highest possible satisfaction or benefits.

Unregulated Amount

A quantity or volume not controlled or limited by laws or administrative rules, often relating to production or trade.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good or service, including both private costs incurred by firms and external costs to others.