A Specific Automotive Part That a Service Station Stocks in Its

question 4

Multiple Choice

A specific automotive part that a service station stocks in its inventory has an 8% chance of being defective. Suppose many cars come into the service station needing this
Part each week. What is the expected number of parts retrieved until the first defective?

• A) 8
• B) 12.5
• C) 10.5
• D) 15
• E) 20

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Definitions:

Behavioral Economics

A field of economic research that combines psychological insights with economic theory to understand how people make decisions and how they can sometimes deviate from rational decision-making.

Threat Of Rejection

The potential or perceived risk of having an offering, proposal, or application denied or refused.

Time Inconsistency

The tendency for people to change their plans about future actions due to a lack of alignment between their short-term desires and long-term goals.

Present Self

The concept of one's current identity or self-perception at the present moment.