Question

11) This question is based a New York Times column (link). In it, a woman named Liza is deciding how often to visit her boyfriend Will and how long to stay. When she visits him, she must pay to park: Near his downtown apartment, parking was particularly nightmarish. If I got lucky and scored a spot nearby, parking cost $3.50 per hour until 4 p.m., $1.50 per hour until 10 p.m. and then nothing until morning, when, at 7, hourly rates shot up to $5.50. Liza has decided that she values her time with Will at $20 per hour when Will is awake and $4 per hour when Will is asleep. Will sleeps until 8:00 a.m. every day and leaves for work at 9:00 a.m. Suppose Liza arrives at Will's house at 1:00 p.m. About what time do we expect her to leave his house? A) 4:00 p.m. B) 7:00 a.m. C) 8:00 a.m. D) 9:00 a.m.

Answer 1

Question 11) Option B - 7:00 am

Lisa is arriving at Will's house at 1:00pm and she values her time with Will at $20 per hour when Will is awake. Parking cost per hour until 4 p.m is $3.50 which is less than $20, so she will stay until 4 p.m. Parking cost until 10 p.m is $1.50 per hour which is again less than $20 which is also the time Will probably would be awake and even if Will sleeps, parking cost is less than Liza who values her time when Will sleeps at $4 per hour.

Next, parking does not cost anything until morning so again it is less than $4 per hour and Liza would stay at Will's place. But, at 7 a.m, Will is asleep until 8 a.m and so Liza values her time at $4 per hour. But parking costs shots up at $5.50 per hour which is more than Liza who values her time at $4 per hour so we expect her to leave his house at 7:00 a.m.