After receiving an impressive commendation following a project, Ash realised the key to her inspiration and success was eating goji berries before starting her work. Ash can buy any number of kilograms of berries for $20 per kilogram. Ash gains a total benefit of $50 from consuming 2 kilograms of berries, and a total benefit of $65 from consuming 3 kilograms of berries. Which of the following statement(s) are true: There is insufficient information to determine the marginal cost of the third kilogram of berries. The average benefit of consuming the third kilogram of berries is $15. Ash should buy the third kilogram of berries because the marginal cost is less than the marginal benefit. The marginal benefit of consuming the third kilogram of berries is $15.
After receiving an impressive commendation following a project, Ash realised the key to her inspiration and success was eating goji berries before starting her work. Ash can buy any number of kilograms of berries for $20 per kilogram. Ash gains a total benefit of $50 from consuming 2 kilograms of berries, and a total benefit of $65 from consuming 3 kilograms of berries. Which of the following statement(s) are true: There is insufficient information to determine the marginal cost of the third kilogram of berries. The average benefit of consuming the third kilogram of berries is $15. Ash should buy the third kilogram of berries because the marginal cost is less than the marginal benefit. The marginal benefit of consuming the third kilogram of berries is $15.
Chapter2: Economics: Eight Powerful Ideas
Section: Chapter Questions
Problem 19P
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Step 1: Introduce the concept of marginal benefit and cost
VIEWStep 2: Calculate the marginal benefit of the third kilogram
VIEWStep 3: Determine the marginal cost of the third kilogram
VIEWStep 4: Compare the marginal benefit and marginal cost of the third kilogram
VIEWStep 5: Address the given statements based on calculations
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