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Securehtp/ng cengage.com /statik/nb/uvevoindex 56722118161010887473067043924elSBN-9781337096546isnapshotld 9517998ud MINDTAP Homework (Ch 01) Back to Assimn Attempts: Keep the itighesti r 3 4. A decision at the margin Deborah is a hard-working college senior. One Sunday, she decides to work nonstop until she has answered 100 practice problems for her economics course. She starts work at E:00 AM and uses a table to keep track of her progress throughout the day. She notices that as sh·gets tired, it takes her longer to solve each problem. Total Problems Answered 8:00 AM 9:00 AM 11 00 AM Use the table to answer the following qestions The marginal, or additional, gain from Deberah's fest hour of work, from 8:00 AM to 9:00 A, is O Type here to search 2 4 6 7 8
Explanation / Answer
Answer: 40
The marginal or additional gain from Deborah’s first hour of work, from 8.00am to 9.00am is 40 problems.
Explanation:
The marginal or additional gain from Deborah’s first hour of work, from 8.00am to 9.00am is 40 problems.
Marginal analysis is the study of the additional gain that one person receives from doing a particular activity compared to the additional cost involved in doing it. When Deborah was not spending any time for solving economic problems, the problems answered by her was 0. And then she decides to spend some time for practising it. After spending an hour for solving problems, the number of problems answered by her increased from 0 to 40. Therefore, the additional gain from spending one hour is the difference between these two i.e 40-0=40.
Like wise the marginal or additional gain from Deborah’s second hour of work,i.e from 9.00am to 10.00am is 70-40=30. The marginal or additional gain from Deborah’s third hour of work , i.e from 10.am to 11.00am is 90-70=20. And the marginal or additional gain from Deborah’s fourth hour of work, I.e from 11.00am to noon is 100-90=0.
Another important concept related to the marginal analysis is Diminishing Marginal Productivity. During the first hour Deborah solved 40 problems it decreased to 30 problems by the second hour and by the fourth hour the number of problems were decreased to 10. Thus marginal or additional gain decreased with increasing number of hours spend on solving problems.
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