1) Have your students take a poll: Students should have survey five friends to get their responses to the question, "if the tax on beer were increased, would it result in you buying fewer cigarettes?"
2) You have six hours to study for two exams tomorrow. The following table shows the relationship between hours of study and test scores.
Economics Psychology
Hours Scores Hours Scores
0 59 0 59
1 67 1 65
2 74 2 70
3 80 3 84
4 85 4 77
5 89 5 79
6 92 6 80
a. Use the rule for determining optimal purchases to decide how many hours you should study each subject. Treat each point on an exam as 1 unit of utility and assume that you consider an extra point on an economics exam to have the same value as an extra point on a psychology exam.
b. Now suppose that you are a psychology major and that you value each point you earn on a psychology exam being worth three times as much as each point you earn on an economics exam. Now how many hours will you study each subject?