Mrs. Siegal has two alternative activities to help relieve her backache. In the

Question

Mrs. Siegal has two alternative activities to help relieve her backache. In the first, she can visit a physiotherapist. The total time for a physiotherapist visit, including travel and waiting, is two hours. Mrs. Siegal earns a wage of $20 an hour. Physiotherapists charge $50 per visit, and Mrs. Siegal does not have any health insurance. As a second alternative, Mrs. Siegal can take pain killers. Each pill costs 50 cents, and Mrs. Siegal needs to take 30 pills per month. The two treatments are not equally effective. The physiotherapy visits yield 10 additional healthy days per month, while the pills yield 6 healthy days.

a. If Mrs. Siegal can choose only one alternative, and if she wants to maximize the most healthy days per dollar that she gets, which option will she choose?

b. If the price of a pill increases to $3, which option will she choose?

Explanation / Answer

a. Mrs. Siegal would choose taking pills alternative as the total monthly costs are only $15 under taking pills option, while it costs $90 under visiting physiotherapist. In the taking pills alternative it costs $2.5 per healthy day, while visiting physiotherapist it costs $9 per health day.

b. in this case, she will choose visiting physiotherapist as costs are equal under both options, but she will get 4 more health days.

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