Compute Probabilities of a Poisson Random Variable

question 92

Multiple Choice

Compute Probabilities of a Poisson Random Variable
-The number of road construction projects that take place at any one time in a certain city follows a Poisson distribution with a mean of 2. Find the probability that more than four road construction projects are currently taking place in the city.

• A) 0.052653
• B) 0.142877
• C) 0.947347
• D) 0.857123

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Definitions:

Adverse Selection

A situation where asymmetric information leads buyers or sellers to make counterproductive selections, commonly seen in insurance markets.

Regulatory Capture

Regulatory capture is a situation where regulatory agencies are dominated by the industries they are supposed to be regulating, leading to decision making that benefits the industry rather than the public.

Industry Being Regulated

The sector of an economy that is subject to oversight and control by governmental or regulatory bodies to ensure fairness, safety, and adherence to rules.

Inefficiencies

Situations or processes that waste resources, resulting in lower productivity or effectiveness than potentially achievable.