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public policy


Answer each of the two questions presented below. You are to provide full answers, including an explanation of your findings. These questions will be rated on completeness AND correctness of answer.

Question #1: The county sheriff has a search-and-rescue operation to cover an extremely hazardous mountain area. There are searches for hikers in sum­mer, lost skiers in winter, and downed aircraft all year long. The sheriff has two units in this division-one uses mechanized land vehicles and the other uses a helicopter. The board of supervisors asked the sheriff which unit was most effective. Looking over weather records, the sheriff found that the proba­bility of bad weather was 0.25; variable weather 0.5; and good weather 0.25. Under bad weather conditions, search for a missing person required four hours with the land vehicles, and seven hours with the helicopter. As the weather became variable. the land vehicle required three hours and the helicopter two hours. In good weather the land vehicle required two hours and, as might be expected, the helicopter search time dropped to one-half hour. What did the sheriff tell the board of supervisors’ Why?

Question #2: A city is considering hosting a future Summer Olympics. The decision to go ahead with putting together a proposal has been left in the hands of the mayor, who asks for your advice. You do some preliminary analysis and come up with the following points: To do nothing at this time will involve no cost to the city, but obviously there will be no gain. Putting together a viable bid for the games will cost the city $500,000 in staff time and expenses Should the city lose its bid, there will be no further costs. Should the city win, the outcomes can vary, but they can be summarized by writing a most optimistic and a most pessimistic scenario. The most optimistic appears to cost the city $100 million more (beyond the $500,000) but returns to it $135 million in revenues. The most pessimistic costs the city $75 million more and returns $65 million. The probability of getting the optimistic is 0.6 and of getting the pessimistic is 0.4 or (1.0 – 0.6). The probability of getting the Olympics is 0.3. Diagram this decision dilemma. What should the city do? What is the overall value or utility of bidding?

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