Question

A decision at the margin 

Charles is a hard-working college junior. One Sunday, he decides to work nonstop until he has answered 250 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

Answer 1

ANSWER:

1) Marginal benefit = (175 - 100) = 75 problems

2) Marginal benefit = (250 - 225) = 25 problems

3) since 1 hour of reading equals 87.5 problems being solved , therefore charles will solve problems till the time the marginal benefit of solving problems is more then 87.5

marginal benefit of 1st hour = (100 - 0) = 100 (which is more then 87.5 )

marginal benefit of 2nd hour = (175 - 100) = 75 (which is less then 87.5)

so charles will have 1 hour of working on problems and 3 hours of reading.

so the correct answer is option a.