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2. Working with Numbers and Graphs Q2 The following graph depicts an orange marginal-cost curve (labeled MC) associated with a constant marginal cost of reading of $15 per hour. The graph also depicts a blue marginal-benefit curve (labeled MB) for reading. On the following graph, use the black point (plus symbol) to indicate the efficient point corresponding to an amount of reading at which the net benefits from reading are maximized. MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) 27 24 21 18 15 12 0 0 36 9 12 15 18 21 READING (Hours per week) 24 MC MB 27 30 MC Initial Efficient Point ☆ New Efficient Point ?

2. Working with Numbers and Graphs Q2 The following graph depicts an orange marginal-cost curve (labeled MC) associated with a constant marginal cost of reading of $15 per hour. The graph also depicts a blue marginal-benefit curve (labeled MB) for reading. On the following graph, use the black point (plus symbol) to indicate the efficient point corresponding to an amount of reading at which the net benefits from reading are maximized. MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) 27 24 21 18 15 12 0 0 36 9 12 15 18 21 READING (Hours per week) 24 MC MB 27 30 MC Initial Efficient Point ☆ New Efficient Point ?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Working with Numbers and Graphs Q2 The following graph depicts an orange marginal-cost curve (labeled MC) associated with a constant marginal cost of reading of $15 per hour. The graph also depicts a blue marginal-benefit curve (labeled MB) for reading. On the following graph, use the black point (plus symbol) to indicate the efficient point corresponding to an amount of reading at which the net benefits from reading are maximized. MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) 30 27 24 21 18 15 12 9 0 3 6 9 12 15 18 21 READING (Hours per week) 24 MC MB 27 30 MC Initial Efficient Point ☆ New Efficient Point ?
Transcribed Image Text:2. Working with Numbers and Graphs Q2 The following graph depicts an orange marginal-cost curve (labeled MC) associated with a constant marginal cost of reading of $15 per hour. The graph also depicts a blue marginal-benefit curve (labeled MB) for reading. On the following graph, use the black point (plus symbol) to indicate the efficient point corresponding to an amount of reading at which the net benefits from reading are maximized. MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) 30 27 24 21 18 15 12 9 0 3 6 9 12 15 18 21 READING (Hours per week) 24 MC MB 27 30 MC Initial Efficient Point ☆ New Efficient Point ?
MARO 12 15 18 READING (Hours per week) 21 24 27 30 Now assume that the marginal costs of reading have increased. On the previous graph, shift the marginal-cost curve (orange line) to reflect the change in the marginal costs of reading. Then use the gray point (star symbol) to plot the new efficient point after the shift in the marginal-cost curve. Finall greater tan area (rectangle symbols) to shade the area representing the change in net benefits associated with this increase in the marginal ding. After the increase in the marginal cost of reading, the new efficient level of reading is benefits associated with the efficient level of reading have less than it was previously. Furthermore, the net
Transcribed Image Text:MARO 12 15 18 READING (Hours per week) 21 24 27 30 Now assume that the marginal costs of reading have increased. On the previous graph, shift the marginal-cost curve (orange line) to reflect the change in the marginal costs of reading. Then use the gray point (star symbol) to plot the new efficient point after the shift in the marginal-cost curve. Finall greater tan area (rectangle symbols) to shade the area representing the change in net benefits associated with this increase in the marginal ding. After the increase in the marginal cost of reading, the new efficient level of reading is benefits associated with the efficient level of reading have less than it was previously. Furthermore, the net
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