Pat and Chris Are Vying for Jordan's Heart,and Both Value

question 88

Multiple Choice

Pat and Chris are vying for Jordan's heart,and both value winning Jordan's affection at $500.Jordan will choose between them based solely on which one spends the most money on gifts,movies,dinner and other enticements.Pat and Chris are fully aware of each other and of each other's spending.Spending must be in increments of $1 or more.
Pat thinks that there is a 50% chance that Chris will continue to spend more on Jordan regardless of the current level of spending.Suppose that Pat has now spent $250 on Jordan and Chris has spent $251.If Pat were to increase spending to $252 the marginal cost of that expenditure would be ___ while the expected marginal benefit is ____.

• A)$252;$250
• B)$2;$250
• C)$250;$250
• D)$250;$500

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Definitions:

Nonprofit

Organizations that are dedicated to furthering a particular social cause or advocating for a shared point of view, without the goal of generating profit for owners or investors.

Charitable

relating to or involving the giving of money, goods, or help to those in need without expecting anything in return.

Subsidized

Financial support provided, often by the government, to help reduce the cost of a service or commodity to the end user.

Economic Development

Activities aimed at improving the economic well-being and quality of life for a community, by creating and retaining jobs and supporting or growing incomes.