ECON-2350 Lecture 8: Medicare
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3. A decision at the margin
Van is a hard-working college senior. On Thursday, he decides to work nonstop until he has answered 200 practice problems for his economics course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem.
Time | Total Problems Answered |
---|---|
8:00 AM | 0 |
9:00 AM | 80 |
10:00 AM | 140 |
11:00 AM | 180 |
Noon | 200 |
Use the table to answer the following questions.
The marginal, or additional, gain from Van's first hour of work, from 8:00 AM to 9:00 AM, is:
The marginal gain from Van's third hour of work, from 10:00 AM to 11:00 AM, is:
Later, the teaching assistant in Van's economics course gives him some advice. Based on past experience, the teaching assistant says, working on 30 problems raises a student's exam score by about the same amount as reading the textbook for 1 hour. For simplicity, assume students always cover the same number of pages during each hour they spend reading.
Given this information, in order to use his 4 hours of study time to get the best exam score possible, how many hours should he have spent working on problems, and how many should he have spent reading?
1 hour working on problems, 3 hours reading
2 hours working on problems, 2 hours reading
3 hours working on problems, 1 hour reading
4 hours working on problems, 0 hours reading