Suppose Duke is driving to a nearby town to attend a dance party and must decide how fast to drive. The marginal benefit of speed is the extra dance time he will get by driving faster, and the marginal cost is the additional risk of collision. The marginal benefit curve is negatively sloped, and the marginal cost curve is positively sloped as shown.

Suppose the normal country band is replaced by Adam Smith and the Invisible Hands, Duke's favorite punk band. Duke's utility from slam dancing is twice his utility from the two-step.

a. Draw and label a new line that will result from the band replacement.

  

100- Marginal Cost 90- 80- 70- 60- 50-.. .... 40- 30- 20- 10- Marginal Benefit 0- 10 20 30 40 50 60 70 80 90 Speed (0,0) Marginal Benefit and Cost ($)