Course: Microeconomics - Ch. 1 Thinking like an Economist - Robert Frank Suppose you can add RAM to your computer at a cost of $50 per MB. Suppose also that the value you have for an additional MB of memory, measured by the amount you are willing to pay, is $200 in the case of the first, then halved in the case of each additional MB.

A) Plot the marginal cost and marginal benefit

B) How many MB should you buy? Now suppose the cost of RAM drops to $25 per MB

C) How many MB should you buy now?

Suppose further that the benefit to you of an additional MB increases to $400 for the first MB and drops by half for each additional MB

D) How many MB should you buy now that the price is lower and the benefit is higher?

ONLY QUESTIONS C) AND D) NEEDED BE ANSWERED. Thanks :D