The economy of a small, remote village located on an island off the coast of Africa is based onfishing the waters of the local seas. Individuals who fish the waters typically choose betweenone of three fishing routes: The inside route, which consists of fishing the waters 0-5 milesfrom shore; the middle route, which consists of fishing the waters 5-15 miles from shore; andthe outside route; which consists of fishing the waters 15-25 miles from shore. The primaryobstacle to the villagers is the current of the local seas, which is unpredictable over even shorttime intervals and makes fishing the outside route incredibly dangerous when it (the current)runs. While fishing the outside route is dangerous on account of the current, the inside routeis largely protected from the current. The value of fishing the outside route is in the quality(in both variety and size) of the fish-driving the value of the fish available from the insideand middle routes down at the local markets that are available when the current does notrun. The average value of the fish from fishing each route-accounting for the costs of theroute depending on whether the current runs are provided below.• Inside route: $1200 dollars when the current runs and $0 when the current does not run.• Middle route: $900 when the current runs and $600 when the current does not run.• Outside route: A loss of $1200 when the current runs and a gain of $1500 when the currentdoes not run.(a) Determine the villager's optimal fishing strategy if they know that the current runs atrandom 60% of the time and fails to run the remaining 40% of the time.

A payoff table gives the different options available for a project and the probability of payoffs…

Answered: (a) Determine the villager's optimal…

(a) Determine the villager's optimal fishing strategy if they know that the current runs at random 60% of the time and fails to run the remaining 40% of the time.

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter17: Property Transactions: § 1231 And Recapture Provisions

Section: Chapter Questions

Problem 2RP

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