Microeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 7

You are driving home from work, and get stuck in a traffic jam. You are considering turning off from your usual route home and taking a longer route that might have less traffic. However, you know that there is some chance that the traffic on your usual, shorter route will clear up. Based on Table 11P-1 , calculate the expected value (in minutes until you arrive home) of each option.