1. In her last-minute preparations for final exams, a student has set aside five hours tosplit between studying for two subjects, finance and economics. Her goal is tomaximize the average grade received in the two courses. (Note that maximizing theaverage grade and maximizing the sum of the grades are equivalent goals.)According to her best guesses, grades vary with study as follows:Study Hours012345Finance Grade707883889092Study Hours Economics Grade075181285387489590a. List the marginal values of additional hours worked for each subjectb. How much time should the student spend studying each subject?c. Suppose the student also is taking an accounting exam and estimates that eachhour of studying will raise her grade by three points. She has allotted two hoursfor studying accounting (in addition to the five hoursalready mentioned). Is this an optimal decision? Explain. (Assume her objectiveis to maximize her average grade across the three courses.)

Marginal value refers to the additional value or benefit gained from consuming or producing one more…

1. In her last-minute preparations for final exams, a student has set aside five hours to split between studying for two subjects, finance and economics. Her goal is to maximize the average grade received in the two courses. (Note that maximizing the average grade and maximizing the sum of the grades are equivalent goals.) According to her best guesses, grades vary with study as follows: Study Hours 0 1 2 3 4 5 Finance Grade 70 78 83 88 90 92 Study Hours Economics Grade 0 1 2 3 4 5 75 81 85 87 89 90 a. List the marginal values of additional hours worked for each subject b. How much time should the student spend studying each subject? c. Suppose the student also is taking an accounting exam and estimates that each hour of studying will raise her grade by three points. She has allotted two hours for studying accounting (in addition to the five hours already mentioned). Is this an optimal decision? Explain. (Assume her objective is to maximize her average grade across the three courses.)

1. In her last-minute preparations for final exams, a student has set aside five hours to split between studying for two subjects, finance and economics. Her goal is to maximize the average grade received in the two courses. (Note that maximizing the average grade and maximizing the sum of the grades are equivalent goals.) According to her best guesses, grades vary with study as follows: Study Hours 0 1 2 3 4 5 Finance Grade 70 78 83 88 90 92 Study Hours Economics Grade 0 1 2 3 4 5 75 81 85 87 89 90 a. List the marginal values of additional hours worked for each subject b. How much time should the student spend studying each subject? c. Suppose the student also is taking an accounting exam and estimates that each hour of studying will raise her grade by three points. She has allotted two hours for studying accounting (in addition to the five hours already mentioned). Is this an optimal decision? Explain. (Assume her objective is to maximize her average grade across the three courses.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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