Reference no: EM131910609

Question 1:

The benefit Arthur gets from spending time in hospital following an operation is shown in the table below: 

Number of days in hospital  0 1 2 3 4 5

Benefit from hospital stay ($) 0 500 800 1000 1100 1000 

With health insurance, each day in hospital costs Arthur $50. Without health insurance, each day in hospital costs him $200. Explain how Arthur should decide how long to spend in hospital following his operation with and without insurance.  Explain how having health insurance affects the length of time Arthur chooses to stay in hospital. 

Question 2:

The table below shows the amount of wheat production of a farm given the number of workers the farm employs. 

Number of Workers 0 1 2 3

Production (kg/day) 0 6 11 14 

The farmer can sell each kg of wheat for $10. The farmer pays each worker $40 per day. How many workers will the farmer employ if she is wants to earn as much profit as possible? Explain.  

Question 3:

Cherie has a two hour lecture starting at 2.00pm. She purchases a parking permit that is valid until 4.00pm. Her class finishes early. Not wanting to waste the money spent on the permit, Cherie decides to go to the cafeteria to have a coffee. Comment on the thinking behind Cherie's choice being careful to describe the decision pitfall illustrated. Briefly explain how Cherie should make the decision about whether or not to go to the cafeteria