Question

Stubborn Steve likes to eat lunch at noon. He also likes to save money so he can buy other goods and services. He does thi by attending "early bird specials" and "late lunchers" programs offered by his favorite local diner. Steve has $R a day to spend on lunch and other stuff. Lunch at noon costs $L. If he delays lunch until t hours after noon, he is able to buy his lunch for a price of SL-t. Similarly if he eats his lunch t hours before noon, he can buy it for a price of $L-t. Assume thi works for fractions of hours as well as whole hours. 2) a. b. c. d. e. How must R, L, and t be related for the problem to make economic sense? If Steve eats lunch at noon, how much money does he have per day to spend on other stuff? How much money per day would he have leftover for other stuff it he ate two hours after noon? What about one hour before noon? In a graph, show the combinations of meal time and money for other stuff that Steve can just afford?

Answer 1

(a) R must be the greatest of all three, as this is his daily budget. Lunch price, L should be the highest price for lunch, i.e. at Noon, at all other times it will be L-t. Hence R>L>t

(b) If lunch taken at noon, he pays L. Hence, he is left with R-L

(c) If two hours after noon, he has R- (L-2) left i.e. (R-L) + 2

(d) One hour before noon: R- (L-1) = (R-L) + 1

(e) A V- shaped graph, with the minimum point at time: Noon an money = R-L

c > ho Le