Which of the following best shows Nick's marginal benefits from playing laser tag?
Understand the Problem
The question is asking which graph best represents Nick's marginal benefits from playing laser tag, based on the information provided regarding his benefits for different numbers of games played.
Answer
The graph should show $25 for the first four games, $10 for the next three, and less than zero beyond the seventh game.
Answer for screen readers
The correct graph would show Nick's marginal benefits starting at $25 for the first four games, dropping to $10 for the next three games, and then indicating negative benefits for any games after the seventh.
Steps to Solve
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Understanding Marginal Benefits
Marginal benefits are the additional benefits gained from consuming one more unit of a good or service. In this context, it refers to the enjoyment Nick gets from playing additional games of laser tag. -
Identifying Benefits per Game
According to the information:
- For the first four games, the marginal benefit is $25 per game.
- For the next three games (5th to 7th), the marginal benefit decreases to $10 per game.
- Beyond the 7th game, the marginal benefit is less than zero.
- Plotting the Marginal Benefits
- For games 1 to 4, plot a horizontal line at $25, from 1 to 4 on the x-axis.
- For games 5 to 7, plot a horizontal line at $10, from 5 to 7 on the x-axis.
- For games beyond 7, the line should fall below the x-axis, indicating negative benefits.
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Choosing the Correct Graph
Find the graph that reflects this behavior:
- It should start at $25 and remain there until game 4.
- It should drop to $10 for games 5 to 7.
- Finally, it should drop below zero for games beyond 7.
The correct graph would show Nick's marginal benefits starting at $25 for the first four games, dropping to $10 for the next three games, and then indicating negative benefits for any games after the seventh.
More Information
Marginal benefits usually decrease with increased consumption, which can be due to fatigue or diminishing returns in pleasure from more games played. This concept aligns with common economic principles regarding consumer behavior.
Tips
- Confusing the marginal benefits with total benefits.
- Ignoring the drop to below zero benefits after a certain point, which can lead to choosing a graph that doesn't reflect exhaustion.
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