ECON 25100 Lecture 2: Positive vs Normative
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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
On 11 October 2017, the January 2018 NSW wheat futures closing price was $240/MT. Suppose, on the morning of 12 October 2017, meteorologists announced an increased probability of excessive rainfall that can considerably reduce the crop yield. All else held constant, which of the following is the most likely candidate of the January 2018 NSW wheat futures closing price on 12 October 2017?
A. |
the provided information is insufficient |
|
B. |
$230/MT |
|
C. |
$250/MT |
|
D. |
$240/MT |