The following table lists the marginal benefit of a gallon of milk for one household's weekly consumption. Marginal Benefit of Milk Gallons Marginal of Milk Benefit Consumed (dollars) 1 $3.50 2 3.00 3 2.50 4 2.00 5 1.50 6 1.00 7 0.50 a. Graph the marginal benefit curve for this household. Instructions: Use the tool provided "Marginal benefit" to plot the line point by point (7 points total). 0 Marginal Benefit ce (dollars) 4.0 3.5 3.0 2.5 2.0 Tools Marginal bene b. If the marginal cost of a gallon of milk is $2.00, what quantity will be consumed? O Less than 4 gallons O More than 4 gallons O Exactly 4 gallons c. If the marginal cost of a gallon of milk increases, how will the household respond? The household will continue to consume the same amount The household will decrease its consumption The household will increase its consumption
The following table lists the marginal benefit of a gallon of milk for one household's weekly consumption. Marginal Benefit of Milk Gallons Marginal of Milk Benefit Consumed (dollars) 1 $3.50 2 3.00 3 2.50 4 2.00 5 1.50 6 1.00 7 0.50 a. Graph the marginal benefit curve for this household. Instructions: Use the tool provided "Marginal benefit" to plot the line point by point (7 points total). 0 Marginal Benefit ce (dollars) 4.0 3.5 3.0 2.5 2.0 Tools Marginal bene b. If the marginal cost of a gallon of milk is $2.00, what quantity will be consumed? O Less than 4 gallons O More than 4 gallons O Exactly 4 gallons c. If the marginal cost of a gallon of milk increases, how will the household respond? The household will continue to consume the same amount The household will decrease its consumption The household will increase its consumption
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:The following table lists the marginal benefit of a gallon of milk for one household's weekly consumption.
Marginal Benefit of Milk
Gallons
Marginal
of Milk
Benefit
Consumed
(dollars)
1
$3.50
2
3.00
3
2.50
4
2.00
5
1.50
6
1.00
7
0.50
a. Graph the marginal benefit curve for this household.
Instructions: Use the tool provided "Marginal benefit" to plot the line point by point (7 points total).
0
Marginal Benefit
ce (dollars)
4.0
3.5
3.0
2.5
2.0
Tools
Marginal bene
Transcribed Image Text:b. If the marginal cost of a gallon of milk is $2.00, what quantity will be consumed?
O Less than 4 gallons
O More than 4 gallons
O Exactly 4 gallons
c. If the marginal cost of a gallon of milk increases, how will the household respond?
The household will continue to consume the same amount
The household will decrease its consumption
The household will increase its consumption
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