Assume the health production function is h = 365 - 1/H, where h is the number of healthy days a person has in each year and His the person's health capital. Assume this person earns a wage of $100/day, and the marginal cost of health investment n = 25 and is constant over time. The annual interest rate is 5 percent, and health capital depreciates at a rate of 15 percent per annum. What is the optimal level of health this person demands? O 25 O 362 O 4.47 O 5.69

Assume the health production function is h = 365 - 1/H, where h is the number of healthy days a person has in each year and His the person's health capital. Assume this person earns a wage of $100/day, and the marginal cost of health investment n = 25 and is constant over time. The annual interest rate is 5 percent, and health capital depreciates at a rate of 15 percent per annum. What is the optimal level of health this person demands? O 25 O 362 O 4.47 O 5.69

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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