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

question 16

Multiple Choice

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs. Assume that all other features of the computer are the same, i.e., CPU speed is the only source of variation. $$\begin{array} { | l | l | l | l | l | } \hline \text { CPU Mhz } & \text { Total Benefit } & \text { Marginal Benefit } & \text { Total Cost } & \text { Marginal Cost } \\\hline 600 & \$ 1,000 & & \$ 900 & \\\hline 700 & \$ 1,500 & & & \$ 100 \\\hline 800 & & \$ 400 & \$ 1,400 & \\\hline 900 & \$ 2,200 & & \$ 1,900 & \\\hline 1,000 & \$ 2,400 & & & \$ 600 \\\hline\end{array}$$ The marginal benefit of upgrading from a 600 Mhz computer to a 700 Mhz computer is:

• A) $1,500.
• B) $500.
• C) $50.
• D) $5.

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Definitions:

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar, ensuring no single entity can control prices.

Profits

The financial gain achieved when the revenues generated from business activities exceed the expenses, taxes, and costs incurred in operating the business.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, reflecting the financial gain in terms of opportunity costs.