1.The chart below shows the units of utility gained (or lost) as Frida studies for her exam.

Hours

Score

Marginal Utility (Units of Utility)

Marginal Costs (Units of Utility)

1

70% (C)

36

5

2

76% (C)

16

9

3

81% (B)

20

15

4

87% (B)

12

27

5

92% (A)

17

40

6

95% (A)

9

55

a.What letter grade do you expect Frida to earn on her exam? (Hint: it is economically rational to weigh marginal utility and marginal cost.)

b.Why is Frida not expected to earn an A?

c.Normally, we expect marginal utility to decline as someone studies more. In this case, the marginal utility falls, rises, falls, etc. Her third hour of studying is expected to give her 20 units of utility while her second hour only gives her 16. Explain why this is the case. (Hint: look at how her grade changes after studying for the third hour.)