Determine if the following statements pertain to optimization by levels or optimization by differences
a. John is attempting to decide on a movie. He determines that the newest Batman movie provides him with $10 more of a benefit than the newest Spiderman movie. He adds to his net benefit by always buying a large popcorn and a large drink.
b. Marcia finds that the net benefit of flying from Chicago to Honolulu on a non-stop United Airlines flight is $400, and the net benefit for the same trip flying on a one-stop American Airlines flight is $200 .
c. Nikki decided to take the first available parking space as she entered the student lot. She felt that the first available space had a $5 premium on all other possible spaces since she did not want to risk being late for her exam.
d. Reagan determined that the net benefit of taking the combination of two online courses and traditional lecture course was $100 . The same three courses online gave her a net benefit of $80; and all three in a lecture-based format gave her a net benefit of $10 .
a. This is an example of optimization by differences since John is stating that the Batman movie provides $10 more in value than the Spiderman movie. Buying a large popcorn and a large drink has no impact on his decision since the net benefit of the popcorn and drink would be added to that of each movie; so the decision on which movie to attend would not be impacted.
b. This is an example of optimization by levels. Marcia has a higher net benefit from flying non-stop.
c. This is an example of optimization by differences. Nikki states that the first parking space gives her $5 greater net value than any other space.
d. Reagan has evaluated her choices of class schedules using the total net benefit from each combination. Therefore, this is optimization by levels.
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