Which of the following best shows Nick's marginal benefits from playing laser tag?
Understand the Problem
The question is asking for the graph that best represents Nick's marginal benefits from playing laser tag based on the provided information about his benefits for each game played.
Answer
The graph shows $25 for the first 4 games, $10 for the next 3 games, and negative beyond that.
Answer for screen readers
The graph that best represents Nick's marginal benefits from playing laser tag shows a horizontal line at $25 for the first 4 games, a horizontal line at $10 for the next 3 games, and then a declining line indicating negative benefits beyond the 7th game.
Steps to Solve
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Identify Marginal Benefits
Nick's marginal benefits for playing laser tag are given as follows:
- For the first four games, the marginal benefit is $25 per game.
- For the next three games (5th through 7th), the marginal benefit is $10 per game.
- After the seventh game, the marginal benefit drops below $0.
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Outline the Marginal Benefits
We can summarize the marginal benefits as:
- Games 1 to 4: $25 each
- Games 5 to 7: $10 each
- Games 8 to 10: $0 or negative benefit
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Graph the Marginal Benefits
Now we can sketch the graph:
- The x-axis represents the number of games played (0 to 10).
- The y-axis represents the marginal benefits (from $0 to $25).
The graph should show:
- A horizontal line at $25 from 0 to 4.
- A horizontal line at $10 from 4 to 7.
- A line trending downwards from 7 to 10 (indicating negative marginal benefits after the 7th game).
The graph that best represents Nick's marginal benefits from playing laser tag shows a horizontal line at $25 for the first 4 games, a horizontal line at $10 for the next 3 games, and then a declining line indicating negative benefits beyond the 7th game.
More Information
This graphically illustrates the concept of diminishing marginal returns, where the additional satisfaction (benefit) from each additional game played decreases after a certain point. In practical terms, Nick finds laser tag less enjoyable after several games.
Tips
- Forgetting to include the drop in marginal benefits after the 7th game. To avoid this, always check how benefits change as more units are consumed.
- Misinterpreting the marginal benefits as total benefits. Remember, marginal benefits relate only to the additional satisfaction from each extra game.
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