Exploring the Maximization Principle

8. Joe likes Tom Thumb's Tiny Burgers. For him, they satisfy an important want. The schedule below shows how much "want-satisfying" power they have:

 

Number of Burgers
Want-Satisfying Power
0
0
1
5
2
9
3
12
4
14
5
15
6
15
7
14

a) If Tom Thumb's Tiny Burgers are free, how many should Joe take?

b) Suppose that for every Burger Joe buys, he must give up something that has 2.5 units of want-satisfying power. How many should he buy?

10. Have you ever wondered why there is so much spam in your e-mail? What do you think the marginal cost curve for spam looks like from the point of view of the spammer? What does the marginal benefit curve look like to the spammer?

11. You are a farmer and there has been a moderate drought. What would a graph showing the marginal benefit of rain look like? (Hint: the horizontal axis measures the amount of rainfall.)


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