Denise Green is currently renting an apartment for $725 per month and paying $275 annually for renter’s insurance. She just found a small townhouse that she can buy for $185,000. She has enough cash for a $10,000 down payment and $4,000 in closing costs. Her bank is offering 30-year mortgages at 6 percent per year. Denise estimated the following costs as a percentage of the home’s price: property taxes, 2.5 percent; homeowner’s insurance, 0.5 percent; and maintenance, 0.7 percent. She is in the 25 percent tax bracket and has an after-tax rate of return on invested funds of 4 percent. Using Worksheet 5.2, calculate the cost of each alternative and recommend the less costly option—rent or buy—for Denise.

Suppose life expectancy in years (l) is a function of two inputs, health expenditures (h) and nutrition expenditures (n) in hundreds of dollars per year. the production function is upper l equals ch superscript 0.40 baseline upper n superscript 0.60l=ch0.40n0.60. beginning with c = 1, a health input of $400400 per year (hequals=44) and a nutrition input of $400400 per year (nequals=44), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. the marginal product of health expenditures when h goes from 44 to 55 is nothing, and the marginal product of health when h goes from 66 to 77 is nothing. (round your answers to three decimal places.)