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John works eight hours per day. Today he has to decide whether to work overtime and...

John works eight hours per day. Today he has to decide whether to work overtime and stay one more hour in the office, or go back home and spend that hour studying for his economics exam. His company pays him $ 70 per day if he works eight hours, and $100 per day if he works nine hours. Assuming that, if John studies one more hour, his exam score increases from 75 to 80, what is John's rational decision?

John decides to work overtime only if he values getting a five-point increase on his exam score more than $ 30.

John decides to work overtime only if he values getting an 80 on his exam less than $100.

John decides to work overtime only if he values getting a five-point increase on his exam score less than $ 30 .

John decides to work overtime only if he values getting an 80 on his exam more than $100.

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Answer #1

Here, note that working for an additional hour pays 100-70=$30 per day to John.

So, the choice with John is to choose to work and earn $30 per day which is same as increasing the exam score by 5 points to be indifferent.

So, here John would decide to work overtime or an extra hour only when $30 values more than 5 points on the exam. Hence, c or the third line is the correct answer.  

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