The Following Accompanying Table Shows the Relationship Between the Speed of a Computer's

question 127

Multiple Choice

The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation) , and only the CPU speeds listed below are available for purchase.   
$\begin{array}{|c|c|c|c|c}\hline \text { CPU GHz } & \text { Total Benefit } & \text { Marginal Benefit } & \text { Total Cost } & \text { Marginal Costs } \\\hline 2.0 & \$ 1,000 & & \$ 900 & \\\hline 2.5 & \$ 1,400 & & & \$ 100 \\\hline 3.0 & & \$ 300 & \$ 1,200 \\\hline 3.5 & \$ 1,900 & & \$ 1,500 & \\\hline 4.0 & \$ 2,000 & & & \$ 400 \\\hline\end{array}$  
Choosing a 3.5GHz computer would be irrational because:

• A)its marginal benefit is less than its marginal cost.
• B)its marginal benefit is equal to its marginal cost.
• C)it is impossible to tell the difference compared to a 3.0GHz computer.
• D)its marginal benefit is greater than its marginal cost.

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