1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at $5 per hour, while the marginal benefits of reading decline (over time) as more reading is performed. In particular, suppose the following table contains the marginal benefit associated with various levels of hours spent reading. Time Spent Reading (Hours) 3 12 MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) Assume the marginal-benefit curve is a straight line through the two points described in the table. 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). o 8 3 19 O Marginal Benefits (Dollars per hour) 8 0 3 2 6 9 12 15 18 21 READING (Hours per week) 24 27 30 Marginal-Cost Curve Marginal-Benefit Curve Efficient Point ?

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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)
24
27
H
30
Marginal-Cost Curve
Marginal-Benefit Curve
Efficient Point
?
Transcribed Image Text: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) 24 27 H 30 Marginal-Cost Curve Marginal-Benefit Curve Efficient Point ?
At any level of reading below the efficient level, the marginal-benefit curve is
reading are
other hand, at any level of reading greater than the efficient amount, the marginal-benefit curve is
that the marginal benefits of reading are
than the marginal costs of reading, and therefore, you can increase net benefits by reading for
hours. Only at the efficient point, where marginal benefits are
the marginal costs of reading are net benefits
the marginal-cost curve. This means the marginal benefits of
hours. On the
the marginal-cost curve. This means
maximized.
than the marginal costs of reading, and therefore, you can increase net benefits by reading for
Transcribed Image Text:At any level of reading below the efficient level, the marginal-benefit curve is reading are other hand, at any level of reading greater than the efficient amount, the marginal-benefit curve is that the marginal benefits of reading are than the marginal costs of reading, and therefore, you can increase net benefits by reading for hours. Only at the efficient point, where marginal benefits are the marginal costs of reading are net benefits the marginal-cost curve. This means the marginal benefits of hours. On the the marginal-cost curve. This means maximized. than the marginal costs of reading, and therefore, you can increase net benefits by reading for
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