Question

B. Maximization, using total analysis.

Suppose you want to get the highest possible combined score. One possible way to achieve this goal is to calculate all the total scores of various alternative study strategies by filling in the blanks below. Do this.

Hours Studied Scores

Econ	Math		Econ	Math		Combined
8	1		100	24		124
7	2		97	44		141
__6_	3		____	____		_____
__5_	4		____	____		_____
_4__	5		____	____		_____
__3_	6		____	____		_____
__2_	7		____	____		_____
1	__8_		____	____		_____

What is the “best” allocation of your time given the goal you have set.

Hours in Econ _______ Hours in Math ______

C. Maximization, using marginal analysis

Another way that you may come up with the best alternative is to use a method economists call marginal analysis. To an economist the marginal unit is the unit of change, or extra unit. So, in this case one more hour of study is the marginal unit of studying, and the score that one hour of study generates in the marginal score. For example, the sixth hour of studying moves your score from 83 to 91 for a marginal increase in your score of 8. Complete the tables below.

Economics Mathematics

Hours	Scores	Marginal Increase		Hours	Scores	Marginal Increase
0	0	------		0	0	------
1	26	26		1	24	24
2	48	22		2	44	20
3	61	_____		3	62	____
4	73	_____		4	75	____
5	83	_____		5	84	____
6	91	_____		6	91	____
7	97	_____		7	96	____
8	100	_____		8	100	____

Answer 1

B. Using total analysis for maximisation, we can see from table that highest combined value = 158 marks.

• Student gets combined 158 marks when he gives 5hrs to Economics and 4hrs to Math
• Ans : Eco = 5hrs, Maths = 4hrs

C.

• We get marginal score by subtracting the score above it eg in
  • Economics : 22 (= 48-26), 13(=61-48) ...and so on
  • Maths : 20 (=44-24), 18(=62-44) .. and so on
• According to marginal principle, student maximise utility by equating marginal utility
  • From above table marginal utility is equal for math and eco when (=13) eco hrs =3 and math hrs =4