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Assume that a study was done on students who were completing their last semester of college...

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Economics

Assume that a study was done on students who were completingtheir last semester of college and had already secured offers ofemployment. That study showed that the students' utility could bemodeled as u(HW, PAY, EXAMS) =500PAY - 5HW - 3EXAMS, wherePAY is weekly starting pay after graduation, in thousandsof dollars; HW is hours of homework per week from allclasses for the semester; and EXAMS is the number of examsper semester. Based on the observed utility function, how muchweekly pay would students be willing to give up to reduce homeworkby 6.00 hours per week? Round your answer to two decimalplaces.

Answer & Explanation Solved by verified expert
3.7 Ratings (560 Votes)
Utility is given by u 500PAY 5HW 3EXAMS Now it is given that he wants to reduce homework hours by 6 hours thus Change in HW 6 Also EXAMS remain same implies    See Answer
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