Suppose you are moving to a new apartment and are going to hire a moving company to help you. Your research finds that the average rate of a moving company is about $250 per hour for two movers (moving truck included). The table below shows your marginal benefit for each hour of the two movers' time (and truck). Hours of Movers' Time Marginal Benefit $850 $600 $400 3 $250 $150 4 $100 $0 a. How many hours should you hire the movers? How much consumer surplus do you receive? Now suppose that the moving company offers you a different payment plan. Instead of paying by the hour, you can pay a flat fee of $1.500 for two movers plus a truck for an eight-hour day. Would you hire the movers? How has your consumer surplus changed? b.

Suppose you are moving to a new apartment and are going to hire a moving company to help you. Your research finds that the average rate of a moving company is about $250 per hour for two movers (moving truck included). The table below shows your marginal benefit for each hour of the two movers' time (and truck). Hours of Movers' Time Marginal Benefit $850 $600 $400 3 $250 $150 4 $100 $0 a. How many hours should you hire the movers? How much consumer surplus do you receive? Now suppose that the moving company offers you a different payment plan. Instead of paying by the hour, you can pay a flat fee of $1.500 for two movers plus a truck for an eight-hour day. Would you hire the movers? How has your consumer surplus changed? b.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 8MC

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Suppose that there are three beachfront parcels of land available for sale in Astoria, and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel. Willingness and Ability to Purchase (Dollars) Alyssa 720,000 Brian 690,000 Crystal 680,000 Nick 900,000 Rosa 810,000 Tim 770,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Alyssa Brian Crystal Nick Rosa Tim Assume that the three beachfront parcels are sold to the people you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a price of $732,500. This fourth parcel _____________be sold…
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Because one’s productivity in the workplace is likely to be affected by one’s health, investment in health could increase earnings to the extent that one might spend money on health care without reducing his or her consumption of other goods. True or False
Because one’s productivity in the workplace is likely to be affected by one’s health, investment in health could increase earnings to the extent that one might spend money on health care without reducing his or her consumption of other goods.
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Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal cost and marginal benefit.
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