the purpose of this is to Demonstrate your ability of translating between math and English using mathematical tools learned in this course.

Instruction

From your experience, identify an action you had to choose or are frequently choosing, a trade-off or cost associated with that action, and the overarching motivation that is driving your action choice. Capture the essential aspects of your choice in an optimization problem including at least one parameter.

Solve the model you have set up. Find at least one comparative static and interpret your formal results in the context of the original setting.

The answer should contain:

(1) A concise description of the real-world observation.

(2) A set-up of the model, including at least one parameter in addition to the choice variable(s). Explain what the variable and parameter names mean, which real-world quantities they represent, and how essential relationships between them are captured in the model.

(3) A formal solution of the model, clearly highlighting the key result, and including sufficiently many intermediate steps so an interested peer can easily follow along.

(4) A comparative static result with respect to at least one parameter.

(5) A discussion that interprets the formal result and the comparative static result in light of the original real-world observation.