Educational production

a) Write down your personal production function for this course; 𝑔(𝑙,𝑡, 𝑒, 𝑠) ∈ [0,100] where 𝑙 ∈
[0,11] is the number of lectures you attend/watch, 𝑡 ∈ [0,11] is the number of tutorials you
attend/watch, 𝑒 ∈ [0,80] is the effort hours you put into doing individual assignments, and 𝑠 ∈
[0,20] is your individual effort hours in doing the group assignment. For simplicity, assume
the start-up pitch group assignment grade only depends on your individual effort 𝑠.
(2 marks)
Use the function you provide in 1a to answer questions 1b, 1c and 1d.
b) What is the value of 𝑔(0,0,0,0) (i.e., what mark do you get for doing nothing at all)?
(0.5 marks)
c) What is the value of 𝑔(11,11, 80,20) (i.e., what mark do you get for studying as hard as
possible? (0.5 marks)
d) Does your production function exhibit increasing, decreasing or constant returns to scale (at
all or some output levels)? Explain. (2 marks)
2) Pricing
a) Provide a real-world example of group (third-degree) price discrimination (with a hyperlink to
the example). Discuss what prevents re-sale in your example (i.e., why people who pay a
lower price can’t buy and resell the good to people who face a higher price). (2 marks)
b) Provide a real-world example of a seller offering a “decoy option”. Discuss how you expect
the demand for the other options to change if this decoy option was removed from the
market by the seller. (2 marks)
c) Provide a real-world example of the “retention-based pricing” idea suggested in the tweet
below or discuss why we don’t see many examples of such pricing schemes. (1 mark)