11. Three roommatesTinker, Evers, and Chanceshare an apartment. It is really cold outside, and they are considering...
Question:
11. Three roommates—Tinker, Evers, and Chance—share an apartment. It is really cold outside, and they are considering turning up the thermostat in the apartment by 1, 2, 3, or 4 degrees. They know that each time they raise the temperature in the apartment by 1 degree, their heating bill will rise by $8. Their individual marginal benefits from making it warmer in the apartment are as follows: Marginal Benefit Increase in Temperature Tinker Evers Chance 1 degree $5 $4 $3 2 degrees $4 $3 $2 3 degrees $3 $2 $1 4 degrees $2 $1 $0
a. Find the marginal social benefit from making it 1, 2, 3, or 4 degrees warmer.
b. By how many degrees should they raise the temperature?
Step by Step Answer:
Microeconomics
ISBN: 9781292214351
2nd Global Edition
Authors: Daron Acemoglu, David Laibson, John List