Ms. Cooper is planning to attend a convention in Honolulu, and she must send in her room reservation immediately. The convention is so large that the activities are held partly in Hotel X and partly in Hotel Y, and Ms. Cooper does not know whether the particular session she wants to attend will be held at Hotel X or Hotel Y. She is planning to stay only one night, which would cost her $66.00 at Hotel X and $62.40 at Hotel Y, and it will cost her an extra $6.00 for cab fare if she stays at the wrong hotel.
(a) If Ms. Cooper feels that the odds are 3 to 1 that the session she wants to attend will be held at Hotel X, where should she make her reservation so as to minimize her expected cost?
(b) If Ms. Cooper feels that the odds are 5 to 1 that the session she wants to attend will be held at Hotel X, where should she make her reservation so as to minimize her expected cost?
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