Question

Martha is required to write a referee report within the next 4 weeks. Each week, she incurs costs measured in instant utils. Assuming the costs per week are as follows:

Week 1: 20 utils
Week 2: 15 utils
Week 3: 25 utils
Week 4: 18 utils
What would be Martha's best option considering the costs and benefits?

a) She should complete the report in Week 2, as it incurs the lowest cost.

b) It is most beneficial for her to finish the report in Week 1, as the costs are relatively lower.

c) The best option for her is to delay the report until Week 3, considering the costs and benefits.

d) She should complete the report in Week 4, as the costs are relatively lower compared to other weeks.

Answer 1

Martha should complete the report in Week 2 as it incurs the lowest cost of 15 utils, allowing her to maximize her utility by minimizing her total costs.

Step-by-step explanation:

The question presented is fundamentally about the concept of utility maximization in economics, specifically around the context of incurring costs (measured in utils) over different weeks for work completion. Martha seeks to determine which week is most optimal for finishing her referee report based on the varying costs per each week.

Comparing the weekly costs: Week 1 at 20 utils, Week 2 at 15 utils, Week 3 at 25 utils, and Week 4 at 18 utils, the decision should be driven by the principle of minimizing her total cost to maximize utility.

Answer (a) suggests that Martha should complete the report in Week 2, as it incurs the lowest cost which aligns well with the goal of utility maximization by selecting the option that offers the highest satisfaction (utility) for the lowest cost.