Question

The following accompanying table shows the relationship between the speed of a computers CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the ony source of variation),.and only the CPU speeds listed below are available for purchase 01 40 Total Marginal Total Marginal CPU GHz Benefit Benefit Cost Costs eBook 900 2.0 $1,000 2.5 $1,400 3.0 3.5 $1,900 4.8$2,e00 $180 $300 $1,200 $1,500 $480

Answer 1

1

CPU GHZ	Tot. Benefit	Mar. Benefit	Tot. Cost	Mar. Cost
2.0	$1000		$900
2.5	$1400	$400	$1000	$100
3.0	$1700	$300	$1200	$200
3.5	$1900	$200	$1500	$300
4.0	$2000	$100	$1900	$40

2. Marginal benefit of 3^rd game = total benefit of 3 games - total benefit of 2 games

Marginal benefit of 3^rd game = 125 - 120 = 5