The nation of Somonga, located in the South Pacific, has asked you to analyze its trade balance (the trade balance is the difference between the total revenue from exports and the total cost of imports in a year). Somonga’s only export is coconut oil. It exports 18,000 metric tons of coconut oil per year. The price of coconut oil in the world market is normally distributed with mean $920 per metric ton and standard deviation $160. Somonga’s total cost of imports in a year is also normally distributed, with mean $16,500,000 and standard deviation $1,600,000. Total cost of imports is independent of the price of coconut oil in the world market.

(2.1) Easy What is the mean of the trade balance? (2.2) Easy What is the standard deviation of the trade balance? (2.3) Moderate What is the probability that the trade balance is negative? (2.4) Challenging What is the probability that the price of coconut oil in the world market is greater than $1000 given that it is greater than $900 ?

Answer rating: 100% (QA)

Let X ob tons the is and x and Y the from exports and imports Somong Somonga exports ob coconut ... View the full answer