Assume you must choose between two mutually exclusive alternatives: A or B. The explicit benefit you receive from alternative A, bA, is equal to $100. And, the explicit cost of choosing alternative A, cA, is $80. Also, the explicit benefit to choosing alternative B, bB, is $120.
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Assume you must choose between two mutually exclusive alternatives: A or B. The explicit benefit
you receive from alternative A, bA, is equal to $100. And, the explicit cost of choosing alternative A,
cA, is $80. Also, the explicit benefit to choosing alternative B, bB, is $120.
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- QUESTION 2 After receiving an impressive commendation following a project, Ash realised the key to her inspiration and success was eating goji berries before starting her work. Ash can buy any number of kilograms of berries for $20 per kilogram. Ash gains a total benefit of $50 from consuming 2 kilograms of berries, and a total benefit of $65 from consuming 3 kilograms of berries. Which of the following statement(s) are true: There is insufficient information to determine the marginal cost of the third kilogram of berries. The average benefit of consuming the third kilogram of berries is $15. Ash should buy the third kilogram of berries because the marginal cost is less than the marginal benefit. The marginal benefit of consuming the third kilogram of berries is $15.1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at $5 per hour, while the marginal benefits of reading decline (over time) as more reading is performed. In particular, suppose the following table contains the marginal benefit associated with various levels of hours spent reading. Time Spent Reading Marginal Benefits (Hours) (Dollars per hour) 8 3 12 Assume the marginal-benefit curve is a straight line through the two points described in the table. MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) On the following graph, use the blue points (circle symbol) to plot the marginal-benefit curve for reading. Next, use the orange points (square symbol) to plot the marginal-cost curve for reading. Finally, use the black point (plus symbol) to indicate the point corresponding to the efficient amount of reading (that is, the point at which the net benefits of reading are maximized). 00 32 N 0 2 3 + 6 9 12 15 18 21 READING (Hours per week)…Specify and explain the typical shapes of marginal-benefifit and marginal-cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefifit, should more or fewer resources be allocated to this product? Explain.
- After graduating college Allen wants to start a business selling hats. He has saved $10,000 which will be enough for the startup costs for his online store. His dad thinks that he should instead invest in a mutual fund that pays 3% per year. If Allen will have materials and labor costs of $4,000 per year and expects a total revenue of $5,500 per year, what is his opportunity cost of starting this business? d. Opportunity costs is not measured in dollars, but only the time he will spend on his business. c. The opportunity cost is $10,000 because he will have to spend that to start the company. a. There is no opportunity cost because he is making a profit. O b. His opportunity cost is the $300 he would have earned from the mutual fund.The owner of a retail footwear business is considering opening a second retail store. The owner would use marginal analysis to compare O The incremental benefit expected from the second store to the cost of the second store O The total benefits gained from the two stores. O The incremental benefit expected from the second store to the total cost of running both stores. O The total benefits gained from the two stores to the cost of running the two storesWhat is the set of techniques in the making of decisions, which compares the costs and benefits, but looks at them subjectively and does NOT translate all concerns into market (dollar) terms? O Cost-Benefit Analysis O Cost-Effective Analysis O Co-Payment O Just ask your economics professor.
- The table below shows the marginal benefit for various inputs. Assume that each level represents a $100 investment, and answer the following questions. (a) If you have an unlimited budget, how much would you spend on each input? Explain.(b) Now, assume you can spend a maximimum of $500. What would you spend on each inputnow? What order would you buy them in?(c) Finally, assume you can borrow as much as you want with an interest rate of 10%. How muchwill you borrow and how will you spend it if you have to pay back the loan within 1 year?to treat a sore back Kyoko undertakes a course of physical therapy.Kyoko's marginal benefit from her first physical therapy session is $250 from her second its $225 , from her third its $175 anf from her its $100. physical threapy sessins cost $175 each. assuming kyoko's final physical threapy session will earn her zero consumer surpus, kyoko will have _ physical threapy sessions and her total consumer surpus will be_ A .four, $0 B. three, $100 c. four, $125 d. three, $125Q6 Homework Answered Due Sep 7th, 11:59 PM . After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events could prompt you to reverse this decision? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. The marginal benefit of going to Spain increases. b The marginal cost of going to Spain increases. The marginal benefit of going to Ireland increases. The marginal cost of going to Ireland decreases. X Your answer
- Fl Hours of free time per day 19 24 The figure shows a student's feasible frontier and her indifference curves for her final exam grade and the hours of free time per day. Based on this information, which of the following statements is correct? The student prefers D to C, as D is on the feasible frontier. A or B may be chosen over C despite being on a lower indifference curve, as the student would never choose a point below the feasible frontier. Any points above IC3 are strictly preferred to the student's final choice but are unattainable. The student should try to attain as high a grade as possible.You rent a car for $29.95. The first 100 miles are free, but each mile thereafter costs 10 cents. You plan to drive it 200 miles. What is the marginal cost of driving the car beyond the first 100 free miles? O The marginal cost is $10.00 plus the cost of gas. O The marginal cost is whatever can be purchased with $29.95 plus $10.00. O The marginal cost is $29.95. The marginal cost is the cost of gas plus the initial payment.13. A layperson says that a proposed government project simplycosts too much and therefore shouldn’t be undertaken.How might an economist’s evaluation be different?14. Economists say that individuals make decisions at themargin. What does this mean?15. How would an economist define the efficient amount oftime spent playing tennis?16. Ivan stops studying before the point at which his marginalbenefits of studying equal his marginal costs. Is Ivan
