You are moving across town. Doing your research, you find that the average rate of a moving company is $250 per hour for a moving crew (moving truck included). The marginal benefit you receive from each hour of the movers' time (and truck) is listed in the accompanying table.   Based on this information, you should hire movers for ____ and you will receive ______ in consumer surplus.   Hours of movers' time Marginal benefit ($) 1 850 2 620 3 500 4 250 5 150 6 100 7 0 8 0   b. Now suppose that instead of paying per hour, a moving company offers a flat rate of $1,200 for movers plus a truck for an eight hour day. If you hired this moving company and used them for the entire eight hours, how much consumer surplus would you gain? consumer surplus: $ _______

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 3.10P
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You are moving across town. Doing your research, you find that the average rate of a moving company is $250 per hour for a moving crew (moving truck included). The marginal benefit you receive from each hour of the movers' time (and truck) is listed in the accompanying table.

 

Based on this information, you should hire movers for ____ and you will receive ______ in consumer surplus.

 

Hours of movers' time Marginal benefit
($)
1 850
2 620
3 500
4 250
5 150
6 100
7 0
8 0

 

b. Now suppose that instead of paying per hour, a moving company offers a flat rate of $1,200 for movers plus a truck for an eight hour day.

If you hired this moving company and used them for the entire eight hours, how much consumer surplus would you gain?

consumer surplus: $ _______
 
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