The following table gives the utility points received by a person from each additional hour of exercise per week, as well as the points that each additional hour costs. Using this table, answer the questions below.

a. Calculate the total benefit and the total cost of exercising for each of the hours in the table.

b. Calculate the net benefit of exercising for each of the hours in the table.

c. How many hours per week should this person exercise to maximize satisfaction? What is the maximum number of net benefit points that can be earned from exercising?

d. Graph total benefit and total cost below. (Remember to plot marginal benefit and marginal cost at the midpoints between the hours.) Explain how these graphs illustrate the maximizing rules.

Transcribed Image Text:

Hours of Exercise 0 1 2 3 4 fim 10. 5 6 Marginal Benefit 60 40 30 20 10 0 Total Benefit 0 Marginal Cost 5 10 20 30 40 55 Total Cost 0 Net Benefit