1. Working with Numbers and Graphs Q1Suppose the marginal costs of reading are constant at $14 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 ReadingMarginal Benefits(Hours)(Dollars per hour)1016404.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 ofreading (that is, the point at which the net benefits of reading are maximized).MARGINAL COST, MARGINAL BENEFIT (S per hour of reading per week)1012142010At any level of reading below the efficient level, the marginal-benefit curve isv the marginal-cost curve. This means the marginal benefits ofreading arev than the marginal costs of reading, and therefore, you can increase net benefits by reading forv hours. On theother hand, at any level of reading greater than the efficient amount, the marginal-benefit curve isv the marginal-cost curve. This meansv than the marginal costs of reading, and therefore, you can increase net benefits by reading forthat the marginal benefits of reading arev hours. Only at the efficient point, where marginal benefits arev the marginal costs of reading are net benefitsmaximized,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).Marginal-Cost Curve-0-Marginal-Benefit CurveEfficient Point15 20 25354045 5030READING (Hours per week)

Marginal cost will be a horizontal line with Y intercept of 14 and MB will be straight downward…

1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at $14 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) 10 16 40 4. 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).

1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at $14 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) 10 16 40 4. 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).

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter1: What Economics Is About

Section: Chapter Questions

Problem 1WNG

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