Question 5 [40 Marks] You have seven mornings per week. On each morning, you can either study, go to the rock- climbing wall, or read. If you rock climb, you must be a member of the club. The membership fee is 100 Bobos each week, charged at the beginning of the week. As member, you pay 10 Bobos each morning you climb. You do not pay for the books you read as you borrow them from the library. (15 Marks] Your economics professor has asked you to produce a table showing your marginal cost for each of 7 mornings you may climb during a week. Your uncle, who has never taken economics, has asked you to explain the table and why the values you wrote down make sense. Provide your answers in sections labelled The Table The Explanation (10 Marks] Assume that in October, you rationally climbed four times per week. At the end of October, you learned that you are not doing well in your courses. You also learned that for November, weekly fee is 50 Bobos per week if you are a member. Your economics professor has been asked to predict and explain what this new information will mean for your weekly climbing In November. What might your professor have written? Provide your answer in a section labelled November [9 Marks] Assume that in March, you rationally climbed four times per week. In April membership fee increased to 200 Bobos and you chose to be a member. If your economics professor believes that you wisely chose to be a member. What does your economics professor predict about your April climbing? Explain. Provide your answer in a section labelled April [6 Marks] On April 1, you inform your economics professor that if you had not missed the fee- increase notification from the club, you would not have renewed for April. What does your economics professor predict about your April climbing? Explain. Provide your answer in a section labelled April redux Question 5 [40 Marks] You have seven mornings per week. On each morning, you can either study, go to the rock- climbing wall, or read. If you rock climb, you must be a member of the club. The membership fee is 100 Bobos each week, charged at the beginning of the week. As member, you pay 10 Bobos each morning you climb. You do not pay for the books you read as you borrow them from the library. (15 Marks] Your economics professor has asked you to produce a table showing your marginal cost for each of 7 mornings you may climb during a week. Your uncle, who has never taken economics, has asked you to explain the table and why the values you wrote down make sense. Provide your answers in sections labelled The Table The Explanation (10 Marks] Assume that in October, you rationally climbed four times per week. At the end of October, you learned that you are not doing well in your courses. You also learned that for November, weekly fee is 50 Bobos per week if you are a member. Your economics professor has been asked to predict and explain what this new information will mean for your weekly climbing In November. What might your professor have written? Provide your answer in a section labelled November [9 Marks] Assume that in March, you rationally climbed four times per week. In April membership fee increased to 200 Bobos and you chose to be a member. If your economics professor believes that you wisely chose to be a member. What does your economics professor predict about your April climbing? Explain. Provide your answer in a section labelled April [6 Marks] On April 1, you inform your economics professor that if you had not missed the fee- increase notification from the club, you would not have renewed for April. What does your economics professor predict about your April climbing? Explain. Provide your answer in a section labelled April redux
