A. Consumer Surplus from Lunch at McDonald\'s Jeremy and Latisha are students wh

Question

A. Consumer Surplus from Lunch at McDonald's Jeremy and Latisha are students who regularly buy hamburgers at McDonald's for lunch. The table shows their daily marginal benefit (MB) schedules for McDonald's hamburgers, with marginal benefit measured as "number of dollars per hamburger." The rice of a hamburger is $5. Jeremy and Latisha each buy three hamburgers for lunch Marginal Benefit Hamburger Jeremy Latisha First Second Third Fourth 25 15 30 A1. Compute Jeremy's consumer surplus. Make sure you state exactly how consumer surplus is measured-not just a number, a number of something. In purchasing three hamburgers, is Jeremy behaving rationally or irrationally? Explain your answer. A2. Compute Latisha's consumer surplus. Make sure you state how consumer surplus is measured-not just a number, a number of something. In purchasing three hamburgers, is Latisha behaving rationally or irrationally? Explain your answer.

Explanation / Answer

Ans

Consumer surplus=marginal benefit-price=25-5+15-5+6-5=31. He is rational because marginal profit is above price

B same methodology

=30-5+10-5+2-5=27.No he was s not behaving rationally since marginal benefit of third unit is less than price. So it is not rational to purchase third unit

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