6. Making "how much" decisions Felix provides cleaning services in his apartment complex. He cleans one apartment per hour, so, working a full day, Felix can clean a total of 8 apartments. The next best use of Felix's time involves online freelance work, which he can pick up at any time for $8 per hour. The following table contains information on Felix's total and marginal costs of cleaning apartments as well as information on his total and marginal benefits from cleaning apartments To clean the first apartment, Felix incurs an opportunity cost of $8 (for the hour of earnings forgone) and explicit costs of $2 for replacing cleaning supplies and upkeep of his equipment for a total cost of $10. Since Felix's total cost is zero when he doesn't clean, the marginal cost of cleaning the first apartment is $10. The marginal cost of cleaning the second apartment is $12-he incurs an additional opportunity cost of $8 and an additional $4 in costs for supplies and equipment upkeep. The total cost of cleaning two apartments is therefore $10 for the first apartment plus an additional $12 for the second, or $22 Since the opportunity cost of tenants' time varies, so too does their willingness to pay for cleaning. Felix's marginal benefit from cleaning arn apartment depends on the tenants' willingness to pay. Assume that the occupant of the first apartment will pay Felix $36 to clean the apartment. Felix's marginal benefit of cleaning the first apartment is therefore $36. Consider that the occupant of the second apartment also has a relatively high opportunity cost of cleaning compared to most other occupants and will pay Felix $34 to clean the apartment. Felix's marginal benefit of cleaning the second apartment is therefore $34. His total benefit from cleaning two apartments is equal to the marginal benefit from the second apartment ($34) plus the marginal benefit of the first ($36), or $70 Complete the following table by entering the missing values Felix's Total Cost Dollars) Felix's Marginal Cost of Apartments Cleaned Dollars) Felix's Total Benefit of Apartments Cleaned Dollars) Felix's Marginal Benefit Quantity of Apartments Cleaned (Dollars) 10 36 34 32 30 28 10 36 70 102 12 36 52 70 16 4 160 20 24 28 204 114 18 8 142 Using the preceding table, plot Felix's marginal cost and marginal benefit curves for cleaning apartments. Be sure to plot on the integers. For example, the marginal cost of the first apartment is $10, so the first point on your marginal cost curve should be (1, 10) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically Marginal Cost 25 Marginal Benefit QUANTITY OF APARTMENTS CLEANED Felix's net benefit from cleaning the fifth apartment is ,and his total net benefit from cleaning five apartments is Felix's net benefit from cleaning the eighth apartment is ,and his total net benefit from cleaning eight apartments is For Felix, the optimal quantity of apartments to clean each day is
