We use a simple computational model, proposed originally by Ben-Naim, to study the anomalous properties of water and the hydrophobic effect. Water molecules are modeled as two-dimensional (2D) Lennard-Jones disks, with three orientation-dependent hydrogen-bonding arms, arranged as in the Mercedes Benz (MB) logo. Phase space is explored using NPT Monte Carlo simulations. For pure water, the MB model qualitatively predicts the density anomaly (and the related negative thermal expansion coefficient at low temperature), the minimum in the isothermal compressibility as a function of temperature, the large anomalous heat capacity, and freezing to the 2D model analogue of ice, a low-density hexagonal crystal phase. For the solvation of nonpolar solutes (disks without H bonds), the model predicts the experimental trends with temperature of the free energy, entropy, enthalpy, molar volume, and heat capacity. A unique feature of these simulations is that they provide well- converged heat capacities of transfer, an important fingerprint of hydrophobicity. This model gives an explanation for the temperature, T(S), at which the transfer entropy of nonpolar solutes is zero: below this temperature, shell water molecules have more hydrogen bonding than bulk water molecules; above T(S), the reverse is true.