MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week)2018161412108A0 12maximized.3 4 5 67READING (Hours per week)8910Marginal-Cost CurveMarginal-Benefit CurveEfficient Point?At any level of reading below the efficient level, the marginal-benefit curve isreading arethe marginal-cost curve. This means the marginal benefits ofhours. On thethan the marginal costs of reading, and therefore, you can increase net benefits by reading forother hand, at any level of reading greater than the efficient amount, the marginal-benefit curve isthat the marginal benefits of reading arethe marginal-cost curve. This meansthan the marginal costs of reading, and therefore, you can increase net benefits by reading forhours. Only at the efficient point, where marginal benefits arethe marginal costs of reading are net benefits 1. Working with Numbers and Graphs Q1Suppose the marginal costs of reading are constant at $10 per hour, while the marginal benefits of reading decline (over time) as more reading isperformed. In particular, suppose the following table contains the marginal benefit associated with various levels of hours spent reading.Time Spent Reading(Hours)28Marginal Benefits(Dollars per hour)164Assume 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 ofreading (that is, the point at which the net benefits of reading are maximized).

The marginal benefit is the maximum amount that is willing to pay for an additional unit of goods…

MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) 20 18 16 14 12 10 8 A O 0 1 maximized. 2 3 5 6 7 READING (Hours per week) 8 9 10 Marginal-Cost Curve Marginal-Benefit Curve Efficient Point At any level of reading below the efficient level, the marginal-benefit curve is reading are the marginal-cost curve. This means the marginal benefits of hours. On the than the marginal costs of reading, and therefore, you can increase net benefits by reading for other hand, at any level of reading greater than the efficient amount, the marginal-benefit curve is_ that the marginal benefits of reading are the marginal-cost curve. This means 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

MARGINAL COST, MARGINAL BENEFIT ($ per hour of reading per week) 20 18 16 14 12 10 8 A O 0 1 maximized. 2 3 5 6 7 READING (Hours per week) 8 9 10 Marginal-Cost Curve Marginal-Benefit Curve Efficient Point At any level of reading below the efficient level, the marginal-benefit curve is reading are the marginal-cost curve. This means the marginal benefits of hours. On the than the marginal costs of reading, and therefore, you can increase net benefits by reading for other hand, at any level of reading greater than the efficient amount, the marginal-benefit curve is_ that the marginal benefits of reading are the marginal-cost curve. This means 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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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