I need an explanation for this Economics question to help me study.
1. Transcendent Technologies is deciding between developing complicated, thought-activated software, or simple, voice-activated software. The voice-activated software would cost $50 million to develop and has a 60% chance of being successfully launched and generating revenue of $100 million. The thought-activated software would be a bonanza if successful, generating $1 billion in revenue. But it is so complicated, it is projected to cost would be $400 million. How likely would success have to be for Transcendent Technologies to opt for the thought-activated software?
2. At an oral auction for used car, half of all bidders have a value of $1,500 and half have a value of $1,900. What is the expected winning bid if there are three bidders?