Question: You are considering how much to study for your microeconomics exam at the end of the week, but all you care about is your upcoming

You are considering how much to study for your microeconomics exam at the end of the week, but all you care about is your upcoming spring break trip to Florida. Fortunately, your parents have offered to contribute $4 toward the cost of your trip for every point you get on the exam. You estimate that with H hours of studying, your parents' contribution (your total benefit from studying) will be B(H) = 40H - H2. This implies that your marginal benefit with H hours of studying is MB(H) = 40 - 2H.But you can also earn $20 per hour working at your pizza delivery job, so your total cost for studying H hours, due to lost wages, is C(H) = 20H,which implies that your marginal cost is MC(H) = 20. How many hours should you spend studying for your exam to maximize the funds you have available for your trip?

Step by Step Solution

3.44 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

You should spend 10 hours studying Explanation When you study for the exam your ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

847-B-E-D-S (2618).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!